For the August 2017 ATOM AotM, we will bend one of the rules. The rule is that a disruption already has to have begun, and be presently underway.

But this time, a conversation in the last month's comments brought forth a vision of a quad-layer disruption that is already in the early stages and will manifest in no more than 15 years time. When fully underway, this disruption will further tighten the screws on government bodies that are far too sclerotic to adapt to the speed of the ATOM.

To start, we will list out the progression of each of the four disruptions separately.

1) Batteries are improving quickly, and while electric vehicles are not yet competitive in terms of cost and charging speeds (partly due to the true cost of imported oil not being directly visible to consumers). At the same time, an electric car has far fewer moving parts, and fewer liquids to deal with. By many estimates, an electric car can last 300,000 before significant deterioration occurs, vs. 150,000 for an internal combustion engine car. Now, under the current ownership model, a car is driven only 12,000 miles/year and is parked 90% of the time or more. The second half of an electric vehicle's lifetime (150,001-300,000 miles) would only begin in year 13 and extend until year 25 of ownership, which is not practical. If only there were a way to avoid having the car remain idle 90% of the time, occupying parking spaces. It may take until 2032 for electric cars to compress the cost delta to the extent of being superior to ICE cars in total ownership costs for the early years, which then leads to the dividend available in the later years of the electric car's life.

2) Autonomous vehicles are a very overhyped technology. Stanford University demonstrated an early prototype in 2007. Yet even a decade later, a fully autonomous car that operates without any human involvement, let alone the benefit of having a network of such cars, seems scarcely any closer.

Eventually, by about 2032, cars will be fully autonomous, widely adopted, and communicate with each other, greatly increasing driving efficiency through high speeds and far less distance between cars than humans can manage. Uber-like services will cost 60-80% less than they do now, since the earnings of the human driver are no longer an element of cost, and Uber charges just 20-30% of the fare itself. It will be cheaper for almost everyone to take the on-demand service all the time, than to own a car outright or even take the bus. If such a car is driven 20 hours a day, it can in fact accrue 300,000 miles in just 5 years of use. This effectively is the only way that electric cars can be driven all the way up to the 300,000 limit.

3) The displacement of brick and mortar retail by e-commerce has far greater implications for the US than for any other country, given the excessive level of land devoted to retails stores and their parking lots. The most grotesque example of this is in Silicon Valley itself (and to a lesser extent, Los Angeles), where vast retail strip mall parking lots are largely empty, yet are within walking distance of tall, narrow townhouses that cost $1.5M despite taking up footprints of barely 600 sqft each.

As the closure of more retail stores progresses, and on-demand car usage reduces the need for so many parking spaces, these vast tracts of land can be diverted for another purpose. In major California metros, the economically and morally sound strategy would be to convert the land into multi-story buildings, preferentially residential. But extreme regulatory hurdles and resistance towards construction of any new housing supply will leave this land as dead capital for as long as the obstructionists can manage.

But in the vast open suburbs of the American interior, land is about to go from plentiful to extremely plentiful. If you think yards in the suburbs of interior cities are large, wait until most of their nearby strip malls are available for redevelopment, and the only two choices are either residential land or office buildings (there are more than enough parks and golf courses in those locations already). Areas where population is already flat or declining will have little choice but to build even more, and hope that ultra-low real estate costs can attract businesses (this will be no problem at all if the ATOM-DUES program is implemented by then).

This disruption is not nearly as much a factor in any country other than the US and, to a lesser extent, Australia, as other countries did not misallocate so much land to retail (and the associated parking lots) in the first place.

But remember, under ATOM principles, the more overdue a disruption is, and the more artificial the obstructions thwarting it, the more sudden it is when it eventually happens. China is not held back by the factors that have led to the abysmally low productivity in US construction, and when there is so much retail land to repurpose, pressure to revive that dead capital will just become too great, even if that means Chinese construction companies have to come in to provide what the US counterparts cannot. This pressure could be the catalyst of the long overdue construction productivity catchup. This topic warrants a lengthy article of its own, but that is for another day.

Hence, the first three factors, and possibly the fourth, combine by 2032 to generate a disruption that will be so comprehensive in the US that the inability of government to change zoning laws and permitting at anything close to the speed of market demand will be greatly exposed.

The first disruption, batteries, alone could be an ATOM AotM, but this time, the cumulative disruption from these multiple factors, even if it will take the next 15 years to accomplish, gets the award.

When people think of FinTech, they think of a few things like peer-to-peer lending, payment companies, asset management firms, or maybe even cryptocurrencies. But one of the most outdated yet burdensome costs in all of finance, spread across the widest range of people, is still overlooked. The mortgage lending process is heavily padded with fees that are remnants of a bygone age.

First, we must begin with the effect of technology on short-term interest rates. The Fed Funds rate was close to zero for several years, and it is apparent that any brief increase in rates by the Federal Reserve will swiftly be reversed once markets punish the move in subsequent months. We are in an age of accelerating and exponential technological deflation, and not only will the Fed Funds rate have to be zero forever, but money-printing will be needed to offset deflation. This process has already been underway for years, and is not yet recognized as part of the long term trend of technological progress.

A 30-year mortgage was the standard format for decades, with a variable-rate mortgage seen as risky after a borrower locks in a low rate on their 30-year mortgage. But when the Fed Funds rate was at nearly zero, the LIBOR (London Interbank Offer Rate) hovered around 0.18% or so. If you get a variable-rate mortgage, then the rate is calculated off of the LIBOR, with an additional premium levied by the lending institution. This premium is about 1.5% or more. When the LIBOR rate was over 3% not too many years ago, the lender premium was only a third of the mortgage, but now, it is 85-90% of the mortgage. So instead of paying 0.18%, the lender pays 1.7%. This huge buffer represents one of the most attractive areas for FinTech to disrupt, as what was once a secondary cost is now the overwhelmingly dominant padding, itself a remnant of a bygone age.

When almost 90% of the interest charged in a mortgage merely represents the value that the lending institution provides, we can examine the components of this and see which of those could be replaced with a lower cost technological alternative. The lender, such as a major bank, provides a brand name, a mortgage officer to meet with face-to-face, and other such provisions. All of this is either unnecessary, or can be provided at much lower cost with the latest technologies. For example, blockchains can ensure the security aspects of the mortgage transaction are robust. Online consumer review services can provide an extra layer of reputational buttressing to any innovative new lending platform. The rationale for such a hefty mortgage markup over the underlying interest rate is just no longer there.

If the lender premium in a mortgage falls from 85-90% down to, say, 50%, then the rate on an adjustable rate mortgage will decline to just twice the LIBOR, or about 0.4%. Even thought the Federal Reserve has recently increased the Fed Funds rate, this is very temporary, and 0% will be the Fed Funds rate for the majority of the forseeable future, just as it has been for the last 9 years.

When this sort of ATOM-derived cost savings on interest payments percolates through the economy, it will cause a series of disruptions that will greatly reduce one of the last main consumer expenditures not yet being attacked by technology. Housing costs have risen above the inflation rate in many major cities, against the grain of technology. This is unnatural, since a home does not spontaneously renovate itself, get bigger, or otherwise increase in inherent value. On the contrary, the materials deteriorate over time, so the value should fall. Yet, home prices rise despite these structural forces, due to artificial decisions to restrict supply, lower bond yields through QE, etc. This artificial propping up of home prices masks the excessive costs in the industry, particularly in the mortgage-lending sector. As Fintech irons out the aforementioned outdated expenses in the mortgage-lending process, many fundamental assumptions about home ownership will change.

Home ownership is a very emotional concept for many buyers (which is why there is a widespread misconception that a person 'owns' their home even while they are making mortgage payments on it, when in reality, ownership is achieved only when the mortgage is fully paid off). This emotion obscures the high costs of obsolete products and procedures that continue to reside in the mortgage industry.

Amidst all the technological disruptions we have seen within the last generation, most people still don't understand that the central origin of most disruptions is an outdated, expensive incumbent system. But the FinTech wing of the ATOM has started the 'cracks in the dam' process against a very substantial and widely-levied cost, and this may be the disruption that brings FinTech's dividends to the masses.

I have recently come into contact with a few professionals in transition, many from the now-shrinking big semiconductor companies. In speaking to them, one thing that stood out is how it takes them 9-12 months or more to secure a new position.

Why is this the case, in an age of accelerating technological progress, as per the ATOM? This is an instance of where culture has prevented the adoption of a solution that is technologically feasible.

Where Cultural Inertia Obstructs Technology : Before the Internet age, if you wanted to research a subject, you had to go to the library, spend hours there, check out some books, and go back home. Overall, this consumed half a day, and could only be conducted during the library's hours of operation. If the books did not have all the information you needed, you had to repeat this process. Even this was available only in the dozen or so countries that have good public libraries in the first place. But now, in the Internet age, the same research can be conducted in mere minutes, from any location. The precision of Google and other search engines continues to improve, and with deep learning, many improvements are self-propagating. There is a 10x to 30x increase in the productivity of searching for information.

If you feel that this example is imprecise, take the case of LinkedIn. It has enabled many aspects of career research and networking that were just not possible before. If a young person wishes to explore dozens of career paths and estimate common patterns, the utility of a certain degree, or the probability of reaching a certain title, LinkedIn has an endless supply of information and people you can identify and communicate with.

Yet despite all of this, job searches are just as lengthy as in the days before the Internet, LinkedIn, and other resources. If a candidate can match with three potential jobs in their search region at any given time, then the connection between employer and candidate should take mere weeks, not close to a year. There is no other widespread transaction within society that takes anywhere near as long. Despite new apps to organize the job search and new social media outlets that announce endless meetups and networking events, technology has clearly failed to generate any productivity gains in this process.

For one thing, the Internet has reduced the marginal cost of an application to so little that each position receives hundreds of candidates, unlike three or four back when paper resumes had to be sent via the US Postal Service. To cope with this, employers use software that searches resumes for keywords. This method selects for certain types of resumes, with keyword optimization superceding more descriptive elements of the resume, and filtering out many suitable candidates in favor of those who know how to game the keyword algorithm.

From this point, a desire to mitigate hiring risk combined with the lack of imagination inherent to most corporations defaults into a practice of increasing the number of interviewers that the candidate faces. Three rounds and a dozen interviews is not uncommon, but by most accounts, job interviews are nearly useless as predictors of performance. In reality, a candidate only needs to be interviewed by three people : the hiring manager, the manager above that, and one lateral peer. If these three people cannot make an accurate assessment, adding several other interviewers is not going to add additional value. Indeed, if the boss's boss cannot make accurate assessment of candidates, then they are failing at the primary skill that an executive is supposed to have. Reference checks are also a peculiar ritual, as a candidate will only submit favorably disposed references who have been contacted beforehand.

Modernizing Hiring For the Information Age : Matching openings with candidates should not be so tedious in this age of search engines, emailed resumes, and LinkedIn. Resistance to change and a miscalculation of risk and opportunity cost are the human obstacles standing athwart favorable evolution.

To correct this obsolete situation, consider the mismanagement that occurs at the source. Only after a hiring manager sees a persistent and pronounced need for additional personnel does the process of getting a requisition approved and advertised commence. Hence, the job begins to receive resumes only several months after the need for a new hire arose. After that point, the lengthy selection and interviewing process takes months more.

Instead, what if the Data Analytics of a corporate setting could be gathered, mined, and processed, so that the AI identifies a cluster of gaps within the existing team, and identifies suitable candidates from LinkedIn? Candidates with the correct skillset could be identified with a compatibility score such as '86% fit', '92% fit', and so on. The entire process from the starting point of where a team begins to find itself understaffed to when a candidate deemed to be an acceptable fit is hired, can compress from over a year to mere weeks. The hefty fees charged by recruiters vanish, and the shorter duration of unemployment reduces all the indirect costs of extended unemployment.

For this level of dynamic assessment of gaps and subsequent candidate mapping, the capability of search and data analytics within a corporation has to evolve to a far more advanced state than presently exists. Emails, performance reviews, and project schedules, etc. all have to be searchable across the same search and patterning capabilities. Then, this has to interface with LinkedIn, which itself has to become far more advanced with the capability for a candidate to continuously re-verify skills and prove certain competencies (through tests, certified courses, etc.). The platform has had no real improvement in capabilities in the last few years, and the obvious next step - generating a complex set of skill parameters for LinkedIn members, and matching that pattern to employers with similar needs, is quite overdue. If this seems like added work for candidates, remember that this effort is far less than the amount of time and hassle it will save in the job search process.

But eventually, with technology companies leading the way, the massive hidden cost of current hiring practices may come to light, and give way to a system that uses AI to find more precise matches with much greater speed.

Conclusion : We now possess the machine learning capabilities to dynamically detect gaps within corporate teams and organizational structures that may be large enough to warrant an increase in headcount. These gaps can be matched with parameters that can be mined from LinkedIn profiles, and provide candidates with an assessment of their approximate fit. A percentage score calculated for each candidate is not only a more accurate indicator than the very imprecise interview process, but is far quicker as well. It is high time that these tools were created by LinkedIn and others, and that corporate culture shifted towards their adoption.

This application of AI is the second most necessary technological disruption that AI can deliver to our civilization at present. For the first, check back for the next article.

I do not have the time to pursue a company built around this type of machine learning product, but if someone else is inspired to take up this challenge, I would certainly like to be on your board of directors.

The recent FOMC meetings continue to feature a range of debate only around the rate at which the Fed Funds rate can be increased up to about 4% (which has not coincided with a robust economy since the late 1990s). They actually describe this as a 'normal' rate, and the process of raising the rate as 'normalization'. The 'Dot Plot' pictured here indicates the paradigm that the Federal Reserve still believes. Even the most 'dovish' members still think that the Fed Funds rate will be above 2% by 2019.

This is dangerously inaccurate. At the start of 2016, the Federal Reserve expected that they will do four rate likes this year itself. Now they are down to an expectation of just two (one more than the one early in this year), and may just halt with one. How can a collection of supposedly the best and wisest economic forecasters be so consistently wrong? A 20% stock market correction will lead to a swift rate reversal and a 25%+ correction will lead to a resumption of QE in excess of $100B/month.

The -2% indicated by the Wu-Xia shadow rate might be as deep as -4% by 2025, under current trends of technological diffusion. The worldwide central bank easing required to halt deflation by that time will be several times higher than today. As per the ATOM policy reform recommendations, this can be an exceptionally favorable thing if the fundamentals are recognized.

In the ATOM, I have written at length about why, barring a substantial increase in the size and directness of worldwide central bank money creation, we are going to enter a major financial crisis as soon as 2017. Among the list of factors contributing to this impending crisis, one that the public seems to be in denial of is the perilous state of the federal budget balance.

The budget deficit governs the rate at which the national debt rises. The interest on the debt is a component of federal expenditure and contributes to the deficit which gets added to the debt which generates more interest. None of that is new, but what is new is how a -3% deficit exists even this late into the economic expansion, and after millions of jobs have been created. This deficit looks good when compared to what it was during the depths of 2009, but that is not the correct apples-to-apples comparison, as we see in the chart.

This is not a problem yet, but almost no one realizes that the buffer that the US has long enjoyed is now gone, and that if a shock were to arise, then it will hence be that much more severe. The trend is towards a very ominous explosion in the deficit when the next recession hits. Even worse, the traditional method of QE will not work this time. A more direct form of QE is the only solution.

However, there may be more nuances to this concept than previously addressed. It may be that since GDP is a human construct, it only happens to be correlated to the accelerating rate of change by virtue of humans being the forefront of advancing intelligence. It could be that once artificial intelligence can advance without human assistance, most types of technology that improve human living standards may stagnate, since the grand goal of propagating AI into space is no longer bottlenecked by human progress. Humans are certainly not the final state of evolution, as evidenced by the much greater suitability of AI for space exploration (AI does not require air or water, etc.).

That is certainly something to think about. Human progress may only be on an accelerating curve until a handoff to AI is completed. After that, metrics quite different than GDP may be the best to measure progress, as the AI perhaps only cares about computational density, TERAFLOPs, etc.

I refer readers back to an article written here in 2011, titled 'The End of Petrotyranny', where I claimed that high oil prices were rapidly burning through the buffer that was shielding oil from technological disruption. I quantified the buffer in an equation, and even provided a point value to how much of the buffer was still remaining at the time.

I am happy to declare a precise victory for this prediction, with oil prices having fallen by two-thirds and remaining there for well over a year. While hydraulic fracturing (fracking) turned out to be the primary technology to bring down the OPEC fortress, other technologies such as photovoltaics, batteries, and nanomaterials contributed secondary pressure to the disruption. The disruption unfolded in accordance with the 2011 Law of Finite Petrotyranny :

From the start of 2011, measure the dollar-years of area enclosed by a chart of the price of oil above $70. There are only 200 such dollar-years remaining for the current world petro-order. We can call this the 'Law of Finite Petrotyranny'.

Go to the original article to see various scenarios of how the dollar-years could have been depleted. While we have not used up the full 200 dollar-years to date, the range of scenarios is now much tighter, particularly since fracking in the US continues to lower its breakeven threshold. At present, over $2T/year that was flowing from oil importers to oil producers, has now vanished, to the immense benefit of oil importers, which are the nations that conduct virtually all technological innovation.

The 2011 article was not the first time this subject of technological pressure rising in proportion to the degree of oil price excess has been addressed here at The Futurist. There were prior articles in 2007, as well as 2006 (twice).

As production feverishly scales back, and some of the less central petrostates implode, oil prices will gradually rise back up, generally saturating at the $70 level (itself predicted in 2006) in order to deplete the remaining dollar-years. But we may never again see oil at such a high price relative to world GDP, as existed from most of 2007-14 (oil would have to be $200+/barrel today to surpass the record of $147 set in 2008, in proportion to World GDP).

Amongst people under the age of 35 in America, a predominant view that I see emerging is how the Baby Boom generation in the US (born 1946-64) is consuming the future of the younger generation in an attempt to finance an opulent retirement. While this may indeed be the political goal of at least some Boomers and the core mission of many retiree organizations, the fiscal situation in the US is far worse for the Boomers than they realize, even for those who don't seek to extract from younger people.

Boomers and Entitlements : While the first Baby Boomer turned 65 in 2011, the median Boomer (born in 1955) turns 65 in 2020, and the last ones turn 65 in 2029, which indicates that their big harvesting of Social Security and Medicare from the government has not even begun yet. Given rising life expectancies, the peak years of Boomer harvesting will be 2015-2035 or so, which means that a huge level of withdrawals are anticipated for this 20-year window.

But alas, someone got to the goodies first. This chart shows how US Federal Debt went from 65% of GDP in 2008 to almost 100% today. That 35-point rise was supposed to be consumed by Boomers seeking to finance their retirement, but now, with debt already so high well before Boomers can get their, the future payouts to Boomers have been crowded out. There is certainly no room for another 35-point rise in Federal Debt as a percentage of GDP (credit downgrades and a capital exodus would happen long before debt could ever reach 135% of GDP), and given that the big debt spike began in 2009, it appears that President Obama and the Democrat Senate have already expended the funds that were supposed to sustain the Boomers.

As debt thresholds that were not meant to be reached until many Boomers were well into their retirement have been pierced ahead of schedule, the squeeze will cause some very ugly intra-Boomer conflicts as each group seeks to secure a portion of the diminished pie, which we will examine later in the article.

Boomers and Home Equity : But it gets worse for the Boomers, even for those who have resources that makes them less dependent on Social Security. The housing market has been in a slump (which I predicted at the very height of the boom in April 2006), and this will, at best, tread water for the next several years. Ultra-low mortgage rates have merely arrested a further decline, and even that deep well has been fully consumed (chart from Calculated Risk, click to enlarge).

While some Baby Boomers believe they still may have enough time to recoup substantial home equity with which they may seek to finance a portion of their retirement, in order to retain their equity, they need a steady flow of first-time buyers to enter the housing market,in numbers greater than the rate at which retiring Boomers want to sell.

Who are these new first-time buyers? Why, the endless supply of young people starting their careers and forming families, of course. But alas; the many members of this generation, born after 1990, will not be in any position to buy the houses that Boomers are seeking to sell.

To cultivate a new generation of home buyers who can take on a mortgage, it is imperative that they do not already have a mortgage-sized debt before that. But the higher education industry got to this generation before the mortgage industry could, and many members of this generation have already signed away the first several years of their earnings to servicing their student loans in a rapidly inflating bubble (chart from The Atlantic, click to enlarge), amounting to some $867 Billion in indebtedness that is yet to abate. It may be unfortunate that this upcoming generation was unavoidably destined to take on debt, and that it was only a question of whether the student loan industry or the mortgage industry yoked them in first. But it appears that student loans won the race to reach their prey, which is bad news for Boomers seeking to sell their homes in 2015-20.

On top of the student loan burden postponing their home purchases, there are more sinister cultural forces that are moving this upcoming generation towards apartments and condos, and away from the single-family homes that Boomers will seek to sell. The US legal system severely disincentivizes young men from family formation by subjecting them to preposterously unfair laws if they enter a modern marital contract, and while those who profit from this status quo have done their best to conceal the risks of marriage and family from young men, the anti-misandry sphere continues to expose the truth, particularly to these younger generations of men. Fewer young men are willing to take on the risk of entering such a lopsided contract.

In desperation, Boomers will turn to the last remaining source of new blood - skilled immigration. Skilled immigrants not only do not have student debt to the degree that American youths do, but are usually from countries that have not been ravaged by misandry. I am strongly in favor of increasing skilled, legal immigration and will go so far as to say America cannot prosper without it, but even here, Boomers are behind the curve, as by the time this bright idea gets favored, a new generation of skilled foreigners will be far less interested in coming to America than their predecessors in the 1990s and 2000s. The opportunities in India and China are much more than they were in the 1990s when America could attract the very best and brightest in the world. But by 2015, the immigrants America can attract will be diminished in quality and number. So financing their retirements on the backs of skilled immigrants as a substitute for a generation of Americans disincentivized from family formation is a scheme the Boomers will find to be too little, too late.

If selling their homes at a price that retains some of their home equity was important Baby Boomers, they should have pre-emptively blocked laws that would greatly inhibit family formation and the resultant purchases of single-family homes, among the next generation of Americans. Boomers let this tragedy happen right in front of them, and will pay for it with their home equity.

All Boomers Are Not Equal : Lest you think I am being harsh to Baby Boomers, there is another level of scrutiny here that cannot be exposed often enough. As I have established elsewhere, 70-80% of all government spending is a transfer from men to women, a default state almost every democracy will revert to over time, and this is especially true of entitlement programs. Since women live 5-7 years longer than men, their average post-65 lifespan is thus about twice as long as a man's. Add to this the fact that women use more healthcare per year than men anyway, and we get the heavily unidirectional transfer from men to women that is Medicare.

This is, of course, an opportunity for Boomer men to finally fight back. When it is considered acceptable for the mainstream media to say the lives of men are a burden when they have outlived their earning years, and Obamacare, with the power to ration healthcare along political lines, is already prepared to fund women's health at the expense of men's, don't think for a minute that the legislative bias will stop there. An additional surtax on men only, greater defunding of male health procedures, etc. are all being discussed. Perhaps this will finally be enough to provoke a reaction from men.

Conclusion : Overall, the fiscal cliff and non-cooperation of younger Americans and immigrants will bring great calamity to any Baby Boomers with a net worth under $2 Million. Only the Boomers wealthy enough to not be dependent on either entitlement programs or home equity will go unscathed, and, unless Boomer men start fighting for their rights, they will find that an entire apparatus has been built to minimize their access Social Security and Medicare that they have paid into. At the same time, despite an organized attempt to disenfranchise men, Boomer women will just not be able to extract more than they are already getting, since even the deepest wells of funding will be exhausted given the unprecedented number of women seeking to live off of the state. While the excess spending has been the work of Democrats, do not think for one minute that Republicans will cut spending even if they win every election they stand in.

Perhaps this event will be necessary in the process of dismantling many archaic and unjust structures.

It is time for an economics lesson that most actual professors of economics will never deliver, because the contradiction in what I am about to explain is often not visible to those immersed within the orthodoxy of their field.

We often hear of 'recessions' as small events and 'depressions' as major events, however the two are defined in a very apples-to-oranges way, that is about to become exposed as we are entering a period that does not fit within either.

A recession only counts the period of the decline, but not the period that it takes for the economy to climb back to the previous high water mark.

A depression counts not only the decline but also the period it takes to return to the high water mark.

Thus, recessions are defined by a definition that is incomplete and deceptive for not accounting for whether the recovery is rapid or slow, while depressions have a more accurate and complete definition. The governments of the US and other nations have gotten away with this since almost every recovery out of a recession since 1948 was rapid enough that this flaw was not noticed. But no longer.

The last recession was deemed by the NBER to have ended in June 2009. However, note this chart from Calculated risk (click to enlarge), which indicates that payroll employment will take several more years to reach its high water mark from before the recession, far longer than any prior recession. That we may be heading into another recession now extends this process even longer.

Now, about depressions, there are some myths that have to be corrected. Some depressions are shallow but very long (like the 'Long Depression' from 1873-96), while others are very deep but shorter. Naturally, when the term 'depression' arises, most people think of the most recent one, which was the Great Depression from 1929-39, which a few people still alive today are old enough to remember. However, a closer look at the Great Depression reveals that the sharp downturn that started in 1929 ended in 1933, and that from 1934 onwards, there was rapid improvement. For all the 'Grapes of Wrath' imagery, anyone who managed to survive until 1934 saw continuous and persistent improvement in economic conditions from the deep bottom.

Now, if we measure this period by the standards that recessions are measured by, there was a steep recession from 1929-33, followed by a recovery, and a much smaller recession in 1937-38. The two recessions would seem unrelated, and the entire 1929-39 period would not be combined into one event. Clearly, the failure to recapture the 1929 high water mark is the determinant of the depression classification lasting until 1939.

Will the present period from 2008 to ~2017(?) be classified as a shallow depression? Perhaps, but this will not be declared such until several years after it is over. Rather, the proper way to assess this economic episode is to measure its deviation from the long-term exponential trendline, and not for the US, but rather in relation to World GDP.

This leads to the longer-term assessment, which is that perhaps we are in a midst of seeing Asia correct to a historically normal percentage of world GDP. As this chart from The Economist shows (click to enlarge), at no time before 1820 was India + China less than 45% of world GDP on a PPP basis, and this chart ends in 2008, before most of the aforementioned India-China surge that I discussed earlier. While India began to decline in 1700, China was at a very high point as recently as 1820. Perhaps the rapid gains that India and China are seeing now is merely a reversion back to historical norms established over 5000 years, where these two nations were always at least 45% of world GDP. If that is the case, the 1820-2020 period was an atypical 200-year golden era for the 'West'. Indeed, the major European powers have already shrunk below any relative size they have been since 1500. The US, of course, is a nation that did not exist for most of the period this chart covers, and thus may not shrink away the way that Europe has, and despite a classification of being part of the 'West' (a grouping Japan is also often shoehorned into), may align closer to Asia due to sheer gravitional pull.

Since economic growth is exponential and accelerating, we now live in an age when it is possible to have such a large deviation from the trendline, while still experiencing minimal absolute growth. This may not be called a 'depression' according to the way this was defined in the 20th century, but for the US it is a departure of a similar magnitude as the 1930s.

As oil prices remain high, we once again see murmurs of anticipated doom from various quarters. Such fears are grossly miscalculated, as I have described in my 2007-08 articles about how oil at $120/barrel creates desirable chain reactions, as well as my rebuttal to the poorly considered beliefs of peak oil alarmists, who seem capable of being sold not one, but two bridges in Brooklyn. Today, however, I am going to combine the concepts in both of those articles with some new analysis I have done to enable us to predict when oil will lose the economic power it currently holds. You are about to see that not only are peak oil alarmists wrong, but they are just about as wrong as those predicting in 1988 that the Soviet Union would soon dominate the world, and will soon be equally worthy of ridicule.

Unenlightened Punditry and Fashionable Posturing :

As I mentioned in a previous article, many observers incessantly contradict themselves on whether they want oil to be inexpensive, or whether they want higher oil prices to spur technological innovations. One of the most visible such pundits is Thomas Friedman, who has many interesting articles on the subject, such as his 2007 piece titled 'Fill 'Er Up With Dictators' :

But as oil has moved to $60 to $70 a barrel, it has fostered a counterwave — a wave of authoritarian leaders who are not only able to ensconce themselves in power because of huge oil profits but also to use their oil wealth to poison the global system — to get it to look the other way at genocide, or ignore an Iranian leader who says from one side of his mouth that the Holocaust is a myth and from the other that Iran would never dream of developing nuclear weapons, or to indulge a buffoon like Chávez, who uses Venezuela’s oil riches to try to sway democratic elections in Latin America and promote an economic populism that will eventually lead his country into a ditch.

But Mr. Friedman is a bit self-contradictory on which outcome he wants, as evidenced across his New York Times columns.

So here’s my prediction: You tell me the price of oil, and I’ll tell you what kind of Russia you’ll have. If the price stays at $60 a barrel, it’s going to be more like Venezuela, because its leaders will have plenty of money to indulge their worst instincts, with too few checks and balances. If the price falls to $30, it will be more like Norway. If the price falls to $15 a barrel, it could become more like America

Either tax gasoline by another 50 cents to $1 a gallon at the pump, or set a $50 floor price per barrel of oil sold in America. Once energy entrepreneurs know they will never again be undercut by cheap oil, you’ll see an explosion of innovation in alternatives.

And by not setting a hard floor price for oil to promote alternative energy, we are only helping to subsidize bad governance by Arab leaders toward their people and bad behavior by Americans toward the climate.

All of these articles were written within a 4-month period in early 2007. Both philosophies are true by themselves, but they are mutually exclusive. Mr. Friedman, what do you want? Higher oil prices or lower oil prices? Such confusion indicates how the debate about energy costs and technology is often high on rhetoric and low on analysis.

Much worse, however, is the fashionable scaremongering that the financial media uses to fill up their schedule, amplified by a general public that gets suckered into groupthink. To separate the whining from the reality, I apply the following simple test to verify whether people are actually being pinched by high oil prices or not. If a large portion of average Americans have made arrangements to carpool to work (as was common in the 1970s), then oil prices are high. Absent the willingness to make this adjustment, their whining about gasoline is not a reflection of actual hardship. This enables us to declare that oil prices are not approaching crisis levels until most 10-mile-plus commuters are carpooling, that too in groups of three, rather than just two. Coordinating of carpools is thus the minimum test of whether oil prices are actually causing any significant changes in behavior.

Fortunately, $100 oil, a price that was considered a harbinger of doom as recently as 2007, is now not even enough to induce carpooling in 2011. This quiet development is remarkably unnoticed, and conceals the substantial economic progress that has occurred.

Economic Adaptations :

The following chart from Calculated Risk (click to enlarge) shows the US trade deficit split between oil and non-oil imports. This chart is not indexed as a percentage of GDP, but if it were, we would see that oil imports at $100/barrel today are not much higher of a percentage of GDP than in 1998, when oil was just $20/barrel. In fact, the US produces much more economic output per barrel of oil compared to 1998. We can thus see that unlike in 1974 when the US economy has much less demand elasticity for oil, today the ability of the economy to adjust oil consumption more quickly in reaction to higher prices makes the bar to experience an 'oil shock' much harder to clear. US oil imports will never again attain the same percentage of GDP as was briefly seen in 2008.

Of even more importance is the amazingly consistent per capita consumption of oil since 1982, which has remained at exactly 4.6 barrels/person despite a tripling real GDP per capita during the same period (chart by Morgan Downey). This immediately deflates the claim that the looming economic growth of China and India will greatly increase oil consumption, since the massive growth from 1982 to 2011 did not manage to do this. At this point, annual oil consumption, currently at around 32 billion barrels, only rises at the rate of population growth - about 1% a year.

This leads me to make a declaration. 32 billion barrels at around $100/barrel is $3.2 Trillion in annual consumption. This is currently less than 5% of nominal world GDP. I hereby declare that :

Oil consumption worldwide will never exceed $4 Trillion/year, no matter how much inflation, political turmoil, or economic growth there is. Thus, 'Peak Oil Consumption' happens long before 'Peak Oil Supply' ever could.

This would mean that oil would gradually shrink as a percentage of world GDP, just as it has shrunk as a percentage of US GDP since 1982. Even when world GDP is $150 Trillion, oil consumption will still be under $4 Trillion a year, and thus a very small percentage of the economy. Mark my words, and proceed further to read about how I can predict this with confidence.

The Carnival of Creative Destruction :

There are at least seven technologies that are advancing to reduce oil demand by varying degrees, many of which have been written about separately here at The Futurist :

1) Natural Gas : Technologies that aid the discovery of natural gas have advanced at great speed, and supplies have skyrocketed to a level that exceeds anything humanity could consume in the next few decades. The US alone has enough natural gas to more than offset all oil consumption, and the price of natural gas is currently on par with $50 oil.

3) Cellulose Ethanol and Algae Oil : Corn ethanol was never going to be suitable in cost or scale, but the infrastructure established by the corn ethanol industry makes the transition to more sophisticated forms of ethanol production easier. But fuels from switchgrass and algae are much more cost-effective, and will be ramping up in 2012. Solazyme is an algae oil company that went public recently, and already has a market capitalization of $1.5 Billion.

5) Telepresence : Telepresence, while expensive today, will drop in price under the Impact of Computing and displace a substantial portion of business air travel, as described in detail here. By 2015, geographically dispersed colleagues will seem to be closer to each other, despite meeting in person less often than they did in 2008.

6) Wind Power : Wind Power already generates almost 3% of global electricity consumption, and is growing quickly. When combined with battery advances that improve the range and power of electric and plug-in hybrid vehicles, we get two simultaneous disruptions - oil being displaced not just by electriciy, but by wind electricity.

Plus, these are just the technologies that displace oil demand. There are also technologies that increase oil supply, such as supercomputing-assisted oil discovery and new drilling techniques. Supply-increasing technologies work to reduce oil prices and while they possibly slow down oil demand displacement, they too work to weaken petrotyranny.

The problem in any discussion of these technologies is that the debate centers around an 'all or none' simplicity of whether the alternative can replace all oil demand, or none at all. That is an unnuanced exchange that fails to comprehend that each technology only has to replace 10% of oil demand. Natural gas can replace 10%, ethanol another 10%, efficiency gains another 10%, wind + solar another 10%, and so on. Thus, if oil consumption as a percentage of world GDP is lower in a decade than it is today, that itself is a huge victory. It hardly matters which technology advances faster than the others (in 2007, natural gas did not appear as though it would take the lead that it enjoys today), what matters is that all are advancing, and that many of these technologies are highly complementary to each other.

What is also overlooked is how quickly the pressure to shift to alternatives grows as oil becomes more expensive. If, say, cellulose ethanol is cost-effective with oil at $70, then oil at $80 causes a modest $10 dollar differential in favor of cellulose. If oil is $120, then this differential is now $50, or five times more. Such a delta causes much greater investment and urgency to ramp up research and production in cellulose ethanol. Thus, each increment in oil price creates a much larger zone of profitability for any alternative.

The Cost of Petrotyranny :

This map of nations scaled in proportion to their petroleum reserves (click to enlarge) replaces thousands of words. Some contend that the easy money derived from exporting oil leads to inevitable corruption and the financing of evil well beyond the borders of petro-states, while others lament the misfortune that this major energy source is concentrated in a very small area containing under 2% of the world's population. Other sources of energy, such as natural gas, are much more evenly distributed across the planet, and this supply chain disadvantage is starting to work against oil.

However, as we saw in the 2008 article, many of these regimes are dancing on a very narrow beam only as wide as the span between oil of $70 and $120/barrel. While a price below $70 would be fatal to the current operations of Iran, Venezuela, and Russia, even a high price leads to a shrinkage in export revenue, as domestic consumption rises to reduce export units to a greater degree than can be offset by a price rise. Furthermore, higher prices accelerate the advance of the previously mentioned technologies. For the first time, we can now estimate how long oil can still hold such an exalted economic status.

Quantifying the Remaining Petro-Yoke :

For the first time, we can make the analysis of both technological and political pressure exerted by a particular oil price more precise. We can now quantify the rate of technological demand destruction, and predict the actual number of years before oil ceases to have any ability to cause economic recessions, and regimes like Iran, Venezuela, and Russia no longer can subsist on oil exports to the same degree. This brings me to the second declaration of this article :

From the start of 2011, measure the dollar-years of area enclosed by a chart of the price of oil above $70. There are only 200 such dollar-years remaining for the current world petro-order. We can call this the 'Law of Finite Petrotyranny'.

Allow me to elaborate.

Through some proprietary analysis, I have calculated that the remaining lifetime of oil's economic importance as follows :

From the start of 2011, take the average price of West Texas Intermediate (WTI), Brent, or NYMEX oil, and subtract $70 from that, each year.

Take the number accumulated, and designate that as 'X' dollar-years.

As soon as X equals to 200 dollar-years, then oil will not just fall below $70, but will never again be a large enough portion of world GDP to have a significant macroeconomic impact.

You can plug in your own numbers to estimate the year in which oil will cease to exert such power. For example, if you believe that oil will average $120, which is $50 above the $70 floor, then the X points are expended at a rate of $50/year, meaning depletion at the end of 2014. If oil instead averages just $100, then the X points are expended at $30/year, meaning it will take 6.67 years, or until late 2017, to consume them. Points are only depleted when oil is above $70, but are not restored if oil is below $70 (as research projects may be discontinued or postponed, but work already done is not erased). For those who (wrongly) insist that oil will soon be $170, the good news for them is that in such an event they will see the X points depleted in just two short years. The graph provides 3 scenarios, of oil averaging $120, $110, and $100, and indicating in which year such a price trend would exhaust the 200 X points from points A, B, and C, which is the area of each of the three rectangles. In reality, price fluctuations will cause variations in the rate of X point depletion, but you get the idea.

Keep in mind the Law of Finite Petrotyranny, and on that basis, welcome any increase in oil prices as the hastening force of oil replacement that it is. My personal opinion? We average about $100/barrel, causing depletion of the X points in 2017 (scenario 'C' in green).

Conclusion :

So what happens after the Law of Finite Petrotyranny manifests itself? Let me pre-empt the strawmen that critics will erect, and state that oil will still be an important source of energy. But most people will no longer care about the price of oil, much as the average person does not keep track of the price of natural gas or coal. Oil will simply be a fuel no longer important enough to cause recessions or greatly alter consumer behavior through short-term spikes. Many OPEC countries will see a great reduction in their power, and will no longer be able to placate their citizens through petro-handouts alone. These countries would do well to act now and diversify their economies, phase in civil liberties while they can still do so incrementally, and prepare for a future of much lower leverage over their current customers.

So cheer oil prices higher so that the X points get frittered away quickly. It will be fun.

Here we are, on the eve of a red wave that will see the GOP wrest over 60 House seats, 8 Senate seats, and 7 Governorships away from the Democrats. As a free-market, small government advocate, I greet this development with only minimal enthusiasm. In fact, on a scale of 1 to 10, while I certainly rate the Democrats as a shameful 1, I cannot give the Republicans a score any higher than a 4. My ratings of 1 and 4, interestingly, offend not just Democrats but Republicans as well. Allow me to elaborate.

Republicans have held the Presidency for 28 of the last 42 years. They have also held majorities in Congress for substantial periods of time. Yet, no one can dispute that the US is far more left-leaning than it was in 1968. Government spending as a percentage of GDP is much higher, incidence of single motherhood is vastly higher, free enterprise is less respected, individual liberties are lower, and popular entertainment has become vulgar, disgusting, and immoral. These are all things Republicans do not desire, yet it has happened under their noses anyway. We can thus conclude that :

Republicans winning elections does not counter leftism, it merely postpones the inexorable advance of leftism.

So why are Republicans unable to advance what their voters want, while the left can advance their agenda whether they are in office or not? The reasons for this are as follows :

Marketing Ignorance : Longtime readers are aware of how I strongly emphasize that one must never refer to leftists as 'liberals'. In reality, they are illiberal, intolerant, and rigid. By allowing them to assign a positive word like 'liberal' or 'progressive' to themselves, the right already concedes the battle before it has even begun. Would you want to enter into a public debate with someone under the agreement that they get to call themselves the 'smart/good person' while you have to be known as the 'dumb/evil person'? Yet this is what the right readily agrees to, and they appear to be incapable of learning from their errors. In 8 years, I have seen just two articles by a Republican describing why it is unwise to refer to totalitarian leftists as 'liberals', while every other article posted daily continues with this foolishness.

But it goes further. For years and years, the left has behaved with extreme hypocrisy on issues of race, ethics, and pro- vs anti-American stances. The response that the right delivers is to point out this hypocrisy in a polite manner, expecting the left to acknowledge their error and not repeat it in the future. Needless to say, the left has no problem with hypocrisy and projection, and has no intention of changing this. Yet, the Republicans still fail to notice that pointing out such examples of hypocrisy has no effect on the debate. The definition of insanity, or at least stupidity, is repeating the same action a number of times, and expecting a different result, but Republicans fail to see that the character of their opponents is far too uncivilized for the toothless tactics that Republicans restrict themselves to.

Take, for example, the African-American vote, which usually goes 90-96% for Democrats. This is true even if the Republican candidate is black and the Democrat is white (as was the case in 3 major races in 2006). An examination of recent history quickly reveals this loyalty towards Democrats as more than a little odd. George Wallace ran for President as a Democrat on a segregationist platform as recently as 1976 (note that this was after Nixon's 'Southern Strategy' approach). Furthermore, Robert Byrd, a senior leader in the KKK, was a US Senator in the Democratic party until 2010. These facts would make it less surprising for blacks to vote 90% Republican than the current reality of the opposite. But this yet again shows how poor Republican messaging is. The party of George Wallace and Robert Byrd still manages to get 90% of the black vote, due to the left's tireless propaganda in black neighborhoods, and historical revisionism in school textbooks in inner-city public schools. As a result, the black vote is not even remotely available to Republicans, and with African Americans being 11% of the US population, for a Democrat to win a nationwide election, he only has to get 40 out of the remaining 90% of votes to be cast. The Republican, by contrast, has to get 50 out of the remaining 90%. That is correct, for a Republican to win, he has to get not 50 out of 100%, but 50 out of 90%.

And while Democrat tactics have been underhanded, the Republicans can only blame themselves for being so weak, inobservant, and slow to comprehend what they are up against.

The Judicial Battlespace, Where Only One Side Shows Up : Elections are only half of the battlefield. The other half is the legislative/judicial landscape where laws are discreetly created and enacted without voter approval. The left tirelessly pushes its agenda through an army of lawyers and judges, with the right not even noticing. This unchallenged activity from the left is the reason that they have managed to reduce their dependence on the electoral process, easily duping Republicans into thinking that winning elections is a 'victory against leftism'. That Republicans be distracted from even noticing this crucial other half of the battlespace is quite acceptable to the left.

This is why a massive form of brutal redistribution in America today is not even noticed by those who claim to oppose socialism. Alimony is awarded to a divorcing wife on a 'no fault' basis, putting the husband into a 70% marginal tax rate. Even if he did not want a divorce, failure to pay this 'no-fault' alimony carries possible imprisonment. Thus, he is placed into near-slavery, and certainly has no incentive to invent new technologies or start new businesses. 10-30% of the male workforce being under a 70% tax rate during their peak earning years cannot be good for the economy, yet not one 'conservative' is fighting this, as pedestalization trumps capitalism in the conservative ideological hierarchy.

Republican Appeasement of 'Feminists' : As I explained in The Misandry Bubble, a lot of men, both left and right-leaning, have an extremely inobservant belief that groveling to women and excusing them of wrongdoings that no man would be excused for, is the way to get women to like them. In reality, women have the opposite reaction to a man who is too willing to appease, and find such a man to be a useful puppet at best. What makes it worse when a conservative Republican does it, is that in being a white knight, he tosses aside every other principle he claims to advocate.

Most would consider Steve Forbes to be a prominent, central representative of conservative Republican ideology. However, in Forbes magazine he has taken topublishing frequent articles that are decidedly misandric. I had the opportunity to ask him about this online, and he surprisingly gave the unthinking answer, "As a man with 5 daughters, I am concerned about women's issues.". How nice of him, but surely someone as intelligent as Steve Forbes would recognize that caring about the enviroment does not equate to an endorsement of the most fringe lunatic enviromentalists. So why can't he make such a distinction with 'feminism', rather than declare that he endorses any and all 'feminists' without questioning the possibility of extremism (which certainly harms his daughters) in their midst?

Now, for any leftist reading this, I am going to reveal a secret to you. The secret is : it is easy to get a conservative to support any and all government programs as long as it is packaged as 'chivalry'. Do you want more government-subsidized daycare for unwed mothers to get them to vote Democrat? Tell a conservative that supporting this is 'chivalrous' while opposing this is 'misogynistic'. Do you want conservatives to support another tax on the wealthy to finance Obamacare? Tell him that women will suffer without Obamacare. Do you want more money to go towards teachers unions so that they can indoctrinate public school students even more deeply into Marxism? Tell a conservative that female teachers are underpaid (even though they aren't), and need a higher wage. Do you want cap-and-trade or any other Al Gore legislation passed? Find some convoluted way to show conservatives that women would suffer more than men if more carbon dioxide were produced. Yes, they really can be duped that easily. The typical conservative will jump at the chance to out-left a leftist when the prospect of appearing like a hero to women (again, refusing to learn that this actually repels women) presents itself. Try it, and see how every other principle, from small government, to free markets, to support for two-parent upbringings, to adherence to the US Constitution, will be jettisoned in their rush to be a pedestalizing white knight.

My Republican friends get angry when I give away this weakness to the other side. My answer to them is that if your side is so weak and needy that you are afraid of this weakness being revealed, how can you possibly support such useful idiots? Reform your side instead, and even I would subsequently rejoin.

These three reasons are why we see conservatives rarely driving an agenda, but rather only opposing what the left dangles before them as a distraction. Hence, the right keeps falling back and falling back, ceding more and more ground with each cycle. The alternating of power between Democrats and Republicans constitute a two-steps-back, one-step-sideways descent into leftism, so pardon me for not being too excited about the sideways step, the mere postponement we are about to take through the party earning a 4 taking seats from the party earning a 1 out of 10. Their inability to distinguish between insignificant side issues and the topics that actually matter, combined with the needy chivalry that trumps every other principle that they claim to hold, makes the current conservative/Republican mainstream fatally flawed.

While I was in strong agreement with the GOP during the crisis of the last decade, the War on Terror, I see them as very much in a 'useful idiot' role in the crisis of this decade, The Misandry Bubble.

This brings us to the core mismatch in US politics. As the emergence of the Tea Party has shown, at least 70% of the electorate wants lower taxes and lower spending. The approval ratings of the last 3 Presidents all rose and fell in tandem with the level of government spending. All this is established, yet the voters can't seem to figure out how to achieve it.

Back to The Misandry Bubble, where I establish that 70-80% of all government spending is a transfer of wealth from men to women in some form or the other. Entitlement programs such as Social Security and Medicare are mostly financed by taxes paid by men, but are mostly consumed by women, who live 7 years longer than men, thus creating a reality where a woman's post-65 lifetime is twice as long as a man's (7 years for a man, 14 years post-65 for a woman). Most of the increase in public sector employees have been female. Through unopposed 'feminist' lobbying, most of the $800B stimulus was diverted away from infrastructure projects since too few women work in those, and instead diverted to the already bloated healthcare and education sectors in order to employ more women. Teachers are not just well-paid, but it is a profession that men are mostly barred from. Extreme subsidization of single motherhood has created an America where 41% of all babies are born out of wedlock.

Therefore, if the electorate is truly interested in shrinking the size of government, they first have to confront the artificially created absurdities in American society that are currently considered normal. There is a reason that all traditional societies, whether European or Asian, shamed unwed mothers and recognized them to be parasites. There is a reason the word 'homewrecker' was common until recently. There is a reason there were no jobs for 'court appointed visitation supervisors' to be employed by the state to oversee the actions of a man who has had his children taken from him on a 'no fault' basis. There is a reason that any successful society defended the institution of marriage fiercely by making marriage at attractive arrangement for the man, which in turn ensured that the woman was better off as well. No successful society has replaced the family unit with government, yet America is attempting to do this with taxpayer funds.

To even the most strident Tea Partier, I ask, how badly do you want to trim government spending? Badly enough to cut single mothers off from the trough, and thus prevent the creation of future single mothers and their spawn? Badly enough to lay off thousands of teachers, and fight teacher's unions attempts to prevent merit-based performance reviews? Badly enough to be far more courageous than needy socons, and work to crush the predatory divorce industry, that strives to increase divorces in order to employ more people in the divorce ecosystem? Badly enough to phase out major elements of SS and Medicare (and Obamacare), even if 'women will suffer from the cutbacks'? Badly enough to be called a 'misogynist', 'loser', and 'worse than Hitler'? Badly enough to receive every form of shaming language they can fling at you?

There will be no reduction in Federal, State, or Local government spending in the US without a fierce and pervasive detection, confrontration, and reduction of state-supported misandry, currently propped up by both Democrats and Republicans.

Do you, the American voter, have what it takes to save America?

As a Futurist, it is my job to bring attention to topics that will become more widely discussed several years from now. When the points detailed here are discussed more openly in 2017-18, remember who defined the heart of the challenge in 2010.

Is the GOP likely to slash government spending to a level that voters seek?

Yes

They will make moderate reductions

They will make no reductions, or worse

Free polls from Pollhost.com

Note on Comments : As I already explained in The Misandry Bubble, any Pavlovian utterance of the word 'misogynist' takes very little probing to quickly reveal itself as just projection of anti-male bigotry outward, and is an admission of such bigotry. Although I am amused that 'feminists' still can't even spell the most important word in their vocabulary.

a) I find it revealing that leftists are quick to parrot some memorized garbage about why taxes should rise back to what they were during the Clinton era, yet the same leftists have no interest in returning to the spending levels of the Clinton era. I am perfectly fine with returning to Clinton-era tax brackets if we also return to Clinton-era spending. Any takers? Come on, any takers?

(crickets chirping as leftists flee to avoid having to address the contradiction between wanting Clinton-era tax levels but not Clinton-era spending levels).

If cornered, a leftist will change the subject and say that the Iraq War is the reason spending is high (note that this does not address the point of why they do not wish to return to Clinton-era spending levels). However, contrary to leftist propaganda, the Iraq War actually cost less than the Obama stimulus, as per the chart below from the Washington Examiner. In fact, exclude the Iraq War, and the budget deficit was all but erased by 2007. At least the Iraq War was ultimately successful. But from 2011 onwards, the deficit is set to widen further if the tax rates rise. GDP will shrink below the current projections, causing tax revenue to shrink despite the higher rate of taxation. Republicans winning a few seats in the 2010 Congressional election may halt the tax increase, but will not reduce spending, as Republicans are far too politically uncreative to overturn this increased spending.

b) How a person feels about the capital gains tax is an intoxicating test of how true to free market principles a person is. The fact that capital gains are far more concentrated among the wealthy than wage income is drives socialists into a crazed frenzy that will have them vehemently demanding that capital gains be taxed at 80% or more. However, raising the tax rate of capital gains is the way to inflict the greatest economic damage for the least increase (in fact, often a decrease) in tax revenue. This is simply because of the fact that capital is highly mobile. Russia, China, and India all have long-term capital gains tax rates of 0%, and short term rates no higher than 15%. By contrast, the US long term rate in states like New York and California currently approaches 25%, will rise to 30% with the expiry of the Bush tax cuts, and rise further to 34% under an Obamacare supplemental tax. Capital, thus, finds a better climate in Russia, China, and India than in the US, and trillions of dollars have already departed from the US. Who won the Cold War again? Or rather, is that the wrong question, with the right question being "Where has the traveling disease of socialism migrated towards?".

There should be no capital gains tax at all. This is for the simple reason that if a person sells an appreciated asset, and then pays a capital gains tax, they no longer can buy back the same asset that they had just sold. For those who screech about the 'rich' making too much, remember that taxing capital gains makes them invest less, which means they will employ fewer people. Everyone is either employed by a rich person, or sells to people employed by a rich person, so punitive capital gains taxes always trickle down to people who are not rich.

c) This brings us to the original question of a new recession in 2011. Since the technical definition of a recession is quite limited, it is easy to concoct a 'stimulus' that pulls demand forward, causes a technical 'end' to the recession (in Q309 in the most recent case), and then is concluded by a lengthy hangover that comes perilously close to a new recession in its own right, discussed under the term of a 'double dip'. All of this is a greatly distracted discussion.

The most important measure of economic health, jobs, has not only not seen any recovery since the end of the prior recession in Q309, but is destined to languish through the end of 2011 and possibly much later. This chart from Calculated Risk (click to enlarge) shows that only has the current recession been deeper than all others in the last 60 years, but it has kept jobs at a very low level for over a year. Not only has this recession extended the vertical axis in this chart, but it is certainly destined to extend the horizontal axis as well (unless you believe that 8 million jobs will be created in the next 18 months). So aside from mention of a 'double dip', this recession is already at least 3 times worse than the average post-war recession. There is no chance of a full recovery to breakeven in the remaining 18 months of the existing horizontal axis of this chart, and it is improbable even by 2013, extending the employment recession to a full 6 years at least. The Techno-sponge keeps liquidity lower than policy-makers realize it is, and a rise in tax rates could dry up what little trickle of job growth is currently being seen.

d) Socialism is much more rigged in favor of the ultrawealthy than capitalism is. This is because in capitalism, there is continuous churn in the ranks of the wealthy, and anyone can be displaced by a new technology or new business model. Everyone has a chance to rise, and everyone at the top needs to continue to compete to stay in place.

In socialism, however, only the ultrawealthy can afford to bypass the oppressive rules placed on everyone else (by hiring lawyers, bribing judges and government officials, etc.). The ultrawealthy thus can erect a wall between them and the rest, and make it nearly impossible for an upper-middle-class person to become wealthy on the merit of innovation or business savvy. Hence, any attempt to create a socialist utopia ends up making it easy for the ultrawealthy to build large moats around their incumbent positions.

e) Let me also add a dash of gender psychology here, and explain why many men are capitalistic, while many women are socialistic. As explained before, female hypergamy dictates that women are biologically driven to share their genes with only the best possible man, and women would rather share a top man with other women than have a lesser man all to themselves. If it is clear that the men at the top will remain there (socialism), there is much less risk in the decision-making process for women. In a capitalistic environment, the men at the top today may not be there in a decade, and there is a far riskier 'stockpicking' aspect to choosing which man's genes are going to have long-term value. Thus is further complicated by the fact that a 'valuable' man in the past usually was so due to fighting skill and capacity for violence, while a 'valuable' man today is one with analytical/entrepreneurial skill, which was not easily monetized in the past. But the human brain does not evolve as fast as it needs to, and if you wonder why a serial killer immediately gets love letters from a large number of women (including educated, married women), but the founders of Google and Facebook do not, this is why. The serial killer has proven himself to be a 'valuable' man as per metrics women are evolved to respond to, that were determinants of male power, before modern society existed. By appearing in the media for having been a serial killer, has received a resounding stamp of validation on his credentials, and is certified as an apex male.

Along the same vein, women are also driven to extract resources from lesser men while cutting them off from the better things that society has to offer. Thus, I find it necessary to mention that of all the socialist policies that are obstructing market forces and preventing job creation, organized misandry is a greatly overlooked one. 'Feminist' groups like NOW have lobbied for stimulus dollars to be diverted towards themselves, and away from areas where fewer women work (such as infrastructure and manufacturing). Passage of the 2009 'stimulus' immediately led to an unprecedented chasm between male and female unemployment rates. This sort of shameless vote-purchasing and disenfranchisement of men, zealously enacted by Democrats and almost as zealously condoned by whiteknighting Republicans, will prove to be very corrosive to the long-term economic health of the US economy. This is where Republicans are fatally flawed - they completely fail to see how they themselves undermine their own goals. I will have much more to say on this before election day.

These five thoughts, though not quite related to each other, have been overlooked among the oceans of ink expended in commentary about the current malaise. Perhaps we are on the brink of a breaking point, where government wastage will soon cause visible declines in quality of life, where overburdening productive workers (men in particular) causes a long overdue backlash, and where the little-understood technological deflation quickens in the absence of much-needed liquidity injections. Let us see how far this unique blend of government incompetence and corruption can go.

Why does it seem that American society is in decline, that fairness and decorum are receding, that mediocrity and tyranny are becoming malignant despite the majority of the public being averse to such philosophies, yet the true root cause seems elusive? What if everything from unsustainable health care and social security costs, to stagnant wages and rising crime, to crumbling infrastructure and metastasizing socialism, to the economic decline of major US cities like Detroit, Cleveland, Pittsburgh, and Baltimore, could all be traced to a common origin that is extremely pervasive yet is all but absent from the national dialog, indeed from the dialog of the entire Western world?

Today, on the first day of the new decade of '201x' years, I am going to tell you why that is. I am hereby triggering the national dialog on what the foremost challenge for the United States will be in this decade, which is the ultimate root cause of most of the other problems we appear to be struggling with. What you are about to read is the equivalent of someone in 1997 describing the expected forces governing the War on Terror from 2001-2009 in profound detail.

This is a very long article, the longest ever written on The Futurist. As it is a guide to the next decade of social, political, and sexual strife, it is not meant to be read in one shot but rather digested slowly over an extended period, with all supporting links read as well. As the months and years of this decade progress, this article will seem all the more prophetic.

Executive Summary : The Western World has quietly become a civilization that has tainted the interaction between men and women, where the state forcibly transfers resources from men to women creating various perverse incentives for otherwise good women to inflict great harm onto their own families, and where male nature is vilified but female nature is celebrated. This is unfair to both genders, and is a recipe for a rapid civilizational decline and displacement, the costs of which will ultimately be borne by a subsequent generation of innocent women, rather than men, as soon as 2020.

Now, the basic premise of this article is that men and women are equally valuable, but have different strengths and weaknesses, and different priorities. A society is strongest when men and women have roles that are complementary to each other, rather than of an adverserial nature. Furthermore, when one gender (either one) is mistreated, the other ends up becoming disenfranchised as well. If you disagree with this premise, you may not wish to read further.

The Cultural Thesis

The Myth of Female Oppression : When you tell someone that they are oppressed, against all statistical and logical evidence, you harm them by generating discouragement and resentment. This pernicious effect is the basis of many forms of needlessly inflicted female unhappiness, as well as the basis for unjustified retaliation against men.

All of us have been taught how women have supposedly been oppressed throughout human existence, and that this was pervasive, systematic, and endorsed by ordinary men who did not face hardships as severe as what women endured. In reality, this narrative is entirely incorrect. The average man was forced to risk death on the battlefield, at sea, or in mines, while most women stayed indoors tending to children and household duties. Male life expectancy was always significantly lower than that of females, and still is.

Warfare has been a near constant feature of human society before the modern era, and whenever two tribes or kingdoms went to war with each other, the losing side saw many of its fighting-age men exterminated, while the women were assimilated into the invading society. Now, becoming a concubine or a housekeeper is an unfortunate fate, but not nearly as bad as being slaughtered in battle as the men were. To anyone who disagrees, would you like for the men and women to trade outcomes?

Most of this narrative stems from 'feminists' comparing the plight of average women to the topmost men (the monarch and other aristocrats), rather than to the average man. This practice is known as apex fallacy, and whether accidental or deliberate, entirely misrepresents reality. To approximate the conditions of the average woman to the average man (the key word being 'average') in the Western world of a century ago, simply observe the lives of the poorest peasants in poor countries today. Both men and women have to perform tedious work, have insufficient food and clothing, and limited opportunities for upliftment.

As far as selective anecdotes like voting rights go, in the vast majority of cases, men could not vote either. In fact, if one compares every nation state from every century, virtually all of them extended exactly the same voting rights (or lack thereof) to men and women. Even today, out of 200 sovereign states, there are exactly zero that have a different class of voting rights to men and women. Any claim that women were being denied rights that men were given in even 1% of historical instances, falls flat.

It is already wrong when a contemporary group seeks reparations from an injustice that occurred over a century ago to people who are no longer alive. It is even worse when this oppression itself is a fabrication. The narrative of female oppression by men should be rejected and refuted as the highly selective and historically false narrative that it is. In fact, this myth is evidence not of historical oppression, but of the vastly different propensity to complain between the two genders.

The Masculinity Vacuum in Entertainment : Take a look at the collage of entertainers below (click to enlarge), which will be relevant if you are older than 30. All of them were prominent in the 1980s, some spilling over on either side of that decade. They are all certainly very different from one another. But they have one thing in common - that there are far fewer comparable personas produced by Hollywood today.

As diverse and imperfect as these characters were, they were all examples of masculinity. They represented different archetypes, from the father to the leader to the ladies man to the rugged outdoorsman to the protector. They were all more similar than dissimilar, as they all were role-models for young boys of the time, often the same young boys. Celebrities as disparate as Bill Cosby and Mr. T had majority overlap in their fan bases, as did characters as contrasting as Jean-Luc Picard and The Macho Man Randy Savage.

At this point, you might be feeling a deep inner emptiness lamenting a bygone age, as the paucity of proudly, inspiringly masculine characters in modern entertainment becomes clear. Before the 1980s, there were different masculine characters, but today, they are conspicuously absent. Men are shown either as thuggish degenerates, or as effete androgynes. Sure, there were remakes of Star Trek and The A-Team, and series finales of Rocky and Indiana Jones. But where are the new characters? Why is the vacuum being filled solely with nostalgia? A single example like Jack Bauer is not sufficient to dispute the much larger trend of masculinity purging.

Modern entertainment typically shows businessmen as villains, and husbands as bumbling dimwits that are always under the command of the all-powerful wife, who is never wrong. Oprah Winfrey's platform always grants a sympathetic portrayal to a wronged woman, but never to men who have suffered great injustices. Absurdly false feminist myths such as a belief that women are underpaid relative to men for the same output of work, or that adultery and domestic violence are actions committed exclusively by men, are embedded even within the dialog of sitcoms and legal dramas.

This trains women to disrespect men, wives to think poorly of their husbands, and girls to devalue the importance of their fathers, which leads to the normalization of single motherhood (obviously with taxpayer subsidies), despite the reality that most single mothers are not victims, but merely women who rode a carousel of men with reckless abandon. This, in turn, leads to fatherless young men growing up being told that natural male behavior is wrong, and feminization is normal. It also leads to women being deceived outright about the realities of the sexual market, where media attempts to normalize single motherhood and attempted 'cougarhood' are glorified, rather than portrayed as the undesirable conditions that they are.

The Primal Nature of Men and Women : Genetic research has shown that before the modern era, 80% of women managed to reproduce, but only 40% of men did. The obvious conclusion from this is that a few top men had multiple wives, while the bottom 60% had no mating prospects at all. Women clearly did not mind sharing the top man with multiple other women, ultimately deciding that being one of four women sharing an 'alpha' was still more preferable than having the undivided attention of a 'beta'. Let us define the top 20% of men as measured by their attractiveness to women, as 'alpha' males while the middle 60% of men will be called 'beta' males. The bottom 20% are not meaningful in this context.

As a result, women are the first to want into a monogamous relationship, and the first to want out. This is neither right nor wrong, merely natural. What is wrong, however, is the cultural and societal pressure to shame men into committing to marriage under the pretense that they are 'afraid of commitment' due to some 'Peter Pan complex', while there is no longer the corresponding traditional shame that was reserved for women who destroyed the marriage, despite the fact that 90% of divorces are initiated by women. Furthermore, when women destroy the commitment, there is great harm to children, and the woman demands present and future payments from the man she is abandoning. A man who refuses to marry is neither harming innocent minors nor expecting years of payments from the woman. This absurd double standard has invisible but major costs to society.

To provide 'beta' men an incentive to produce far more economic output than needed just to support themselves while simultaneously controlling the hypergamy of women that would deprive children of interaction with their biological fathers, all major religions constructed an institution to force constructive conduct out of both genders while penalizing the natural primate tendencies of each. This institution was known as 'marriage'. Societies that enforced monogamous marriage made sure all beta men had wives, thus unlocking productive output out of these men who in pre-modern times would have had no incentive to be productive. Women, in turn, received a provider, a protector, and higher social status than unmarried women, who often were trapped in poverty. When applied over an entire population of humans, this system was known as 'civilization'.

All societies that achieved great advances and lasted for multiple centuries followed this formula with very little deviation, and it is quite remarkable how similar the nature of monogamous marriage was across seemingly diverse cultures. Societies that deviated from this were quickly replaced. This 'contract' between the sexes was advantageous to beta men, women over the age of 35, and children, but greatly curbed the activities of alpha men and women under 35 (together, a much smaller group than the former one). Conversely, the pre-civilized norm of alpha men monopolizing 3 or more young women each, replacing aging ones with new ones, while the masses of beta men fight over a tiny supply of surplus/aging women, was chaotic and unstable, leaving beta men violent and unproductive, and aging mothers discarded by their alpha mates now vulnerable to poverty. So what happens when the traditional controls of civilization are lifted from both men and women?

1) Easy contraception (condoms, pills, and abortions): In the past, extremely few women ever had more than one or two sexual partners in their lives, as being an unwed mother led to poverty and social ostracization. Contraception made it possible for females to act on their urges of hypergamy.

2) 'No fault' divorce, asset division, and alimony : In the past, a woman who wanted to leave her husband needed to prove misconduct on his part. Now, the law has changed to such a degree that a woman can leave her husband for no stated reason, yet is still entitled to payments from him for years to come. This incentivizes destruction because it enables women to transfer the costs of irresponsible behavior onto men and children.

3) Female economic freedom : Despite 'feminists' claiming that this is the fruit of their hard work, inventions like the vacuum cleaner, washing machine, and oven were the primary drivers behind liberating women from household chores and freeing them up to enter the workforce. These inventions compressed the chores that took a full day into just an hour or less. There was never any organized male opposition to women entering the workforce (in China, taxes were collected in a way that mandated female productivity), as more labor lowered labor costs while also creating new consumers. However, one of the main reasons that women married - financial support - was no longer a necessity.

4) Female-Centric social engineering : Above and beyond the pro-woman divorce laws, further state interventions include the subsidization of single motherhood, laws that criminalize violence against women (but offer no protection to men who are the victims of violence by women, which happens just as often), and 'sexual harassment' laws with definitions so nebulous that women have the power to accuse men of anything without the man having any rights of his own.

These four forces in tandem handed an unprecedented level of power to women. The technology gave them freedom to pursue careers and the freedom to be promiscuous. Feminist laws have done a remarkable job of shielding women from the consequences of their own actions. Women now have as close to a hypergamous utopia as has ever existed, where they can pursue alpha males while extracting subsidization from beta males without any reciprocal obligations to them. Despite all the new freedoms available to women that freed them from their traditional responsibilities, men were still expected to adhere to their traditional responsibilities.

Marriage 2.0 : From the West to the Middle East to Asia, marriage is considered a mandatory bedrock of any functioning society. If marriage is such a crucial ingredient of societal health, then the West is barreling ahead on a suicidal path.

We earlier discussed why marriage was created, but equally important were the factors that sustained the institution and kept it true to its objectives. The reasons that marriage 'worked' not too long ago were :

2) It was entirely normal for 10-20% of young men to die or be crippled on the battlefield, or in occupational accidents. Hence, there were always significantly more women than able-bodied men in the 20-40 age group, ensuring that not all women could marry. Widows were common and visible, and vulnerable to poverty and crime. For these reasons, women who were married to able-bodied men knew how fortunate they were relative to other women who had to resort to tedious jobs just to survive, and treated their marriage with corresponding respect.

3) Prior to the invention of contraception, female promiscuity carried the huge risk of pregnancy, and the resultant poverty and low social status. It was virtually impossible for any women to have more than 2-3 sexual partners in her lifetime without being a prostitute, itself an occupation of the lowest social status.

4) Divorce carried both social stigma and financial losses for a woman. Her prospects for remarriage were slim. Religious institutions, extended clans, and broader societal forces were pressures to keep a woman committed to her marriage, and the notion of leaving simply out of boredom was out of the question.

Today, however, all of these factors have been removed. This is partly the result of good forces (economic progress and technology invented by beta men), but partly due to artificial schemes that are extremely damaging to society.

For one thing, the wedding itself has gone from a solemn event attended only by close family and friends, to an extravaganza of conspicuous consumption for the enjoyment of women but financed by the hapless man. The wedding ring itself used to be a family heirloom passed down over generations, but now, the bride thumbs through a catalog that shows her rings that the man is expected to spend two months of his salary to buy. This presumption that somehow the woman is to be indulged for entering marriage is a complete reversal of centuries-old traditions grounded in biological realities (and evidence of how American men have become weak pushovers). In some Eastern cultures, for example, it is normal even today for either the bride's father to pay for the wedding, or for the bride's family to give custody of all wedding jewelry to the groom's family. The reason for this was so that the groom's family effectively had a 'security bond' against irresponsible behavior on the part of the bride, such as her leaving the man at the (Eastern equivalent of the) altar, or fleeing the marital home at the first sign of distress (also a common female psychological response). For those wondering why Indian culture has such restrictions on women and not men, restrictions on men were tried in some communities, and those communities quickly vanished and were forgotten. There is no avoiding the reality that marriage has to be made attractive to men for the surrounding civilization to survive. Abuse and blackmail of women certainly occurred in some instances, but on balance, these customs existed through centuries of observing the realities of human behavior. Indian civilization has survived for over 5000 years and every challenge imaginable through enforcement of these customs, and, until recently, the Christian world also had comparable mechanisms to steer individual behavior away from destructive manifestations. However, if the wedding has mutated into a carnival of bridezilla narcissism, the mechanics of divorce are far more disastrous.

In an 'at will' employment arrangement between a corporation and an employee, either party can terminate the contract at any time. However, instead of a few weeks of severance, imagine what would happen if the employer was legally required to pay the employee half of his or her paycheck for 20 additional years, irrespective of anything the employee did or did not do, under penalty of imprisonment for the CEO. Suppose, additionally, that it is culturally encouraged for an employee to do this whenever even minor dissatisfaction arises. Would businesses be able to operate? Would anyone want to be a CEO? Would businesses even form, and thus would any wealth be created, given the risks associated with hiring an employee? Keep these questions in mind as you read further.

Divorce lawyers, like any other professional group, will seek conditions that are good for business. What makes attorneys different from, say, engineers or salespeople, is that a) they know precisely how to lobby for changes to the legal system, bypassing voters and the US constitution, that guarantees more revenue for them, and b) what benefits them is directly harmful to the fabric of society in general, and to children in particular. When they collude with rage-filled 'feminists' who openly say that 90% of the male gender should be exterminated, the outcome is catastrophic.

The concept of 'no fault' divorce by itself may not be unfair. The concepts of asset division and alimony may also be fair in the event of serious wrongdoing by the husband. However, the combination of no-fault divorce plus asset division/alimony is incredibly unfair and prone to extortionary abuse. The notion that she can choose to leave the marriage, yet he is nonetheless required to pay her for years after that even if he did not want to destroy the union, is an injustice that should not occur in any advanced democracy. Indeed, the man has to pay even if the woman has an extramarital affair, possibly even being ordered to pay her psychiatric fees. Bogus claims by 'feminists' that women suffer under divorce are designed to obscure the fact that she is the one who filed for divorce. Defenders of alimony insist that a woman seeking a divorce should not see a drop in living standards, but it is somehow acceptable for the husband to see a drop even if he did not want a divorce. I would go further and declare that any belief that women deserve alimony on a no-fault basis in this day age is utterly contradictory to the belief that women are equals of men. How can women both deserve alimony while also claiming equality? In rare cases, high-earning women have had to pay alimony to ex-husbands, but that is only 4% of the time, vs. the man paying 96% of the time. But it gets worse; much worse, in fact.

Even if the woman chooses to leave on account of 'boredom', she is still given default custody of the children, which exposes the total hypocrisy of feminist claims that men and women should be treated equally. Furthermore, the man is required to pay 'child support' which is assessed at levels much higher than the direct costs of child care, with the woman facing no burden to prove the funds were spent on the child, and cannot be specified by any pre-nuptial agreement. The rationale is that 'the child should not see a drop in living standards due to divorce', but since the mother has custody of the child, this is a stealthy way in which feminists have ensured financial maintenence of the mother as well. So the man loses his children and most of his income even if he did not want divorce. But even that is not the worst-case scenario.

The Bradley Amendment, devised by Senator Bill Bradley in 1986, ruthlessly pursues men for the already high 'child support' percentages, and seizes their passports and imprisons them without due process for falling behind in payments, even if on account of job loss during a recession. Under a bogus 'deadbeat dads' media campaign, 'feminists' were able to obscure the fact that women were the ones ending their marriages and with them the benefit that children receive from a two-parent upbringing, and further demanding unusually high spousal maintenence, much of which does not even go to the child, from a dutiful ex-husband who did not want a divorce, under penalty of imprisonment. So the legal process uses children as pawns through which to extract an expanded alimony stream for the mother. Talk about a multi-layer compounding of evil. The phony tactic of insisting that 'it is for the children' is used to shut down all questions about the use of children as pawns in the extortion process, while avoiding scrutiny of the fact that the parent who is choosing divorce is clearly placing the long-term well-being of the children at a very low priority.

So as it stands today, there are large numbers of middle-class men who were upstanding citizens, who were subjected to divorce against their will, had their children taken from them, pay alimony masked as child support that is so high that many of them have to live out of their cars or with their relatives, and after job loss from economic conditions, are imprisoned simply for running out of money. If 10-30% of American men are under conditions where 70% or more of their income is taken from them under threat of prison, these men have no incentive to start new businesses or invent new technologies or processes. Having 10-30% of men disincentivized this way cannot be good for the economy, and is definitely a contributor to current economic malaise, not to mention a 21st-century version of slavery.Sometimes, the children are not even biologically his.

Anyone who believes that two-parent families are important to the continuance of an advanced civilization, should focus on the explosive growth in revenue earned by divorce lawyers, court supervisors, and 'feminist' organizations over the past quarter-century. If Western society is to survive, these revenues should be chopped down to a tenth of what they presently are, which is what they would be if the elements that violate the US Constitution were repealed.

Marriage is no longer a gateway to female 'companionship', as we shall discuss later. For this reason, as a Futurist, I cannot recommend 'marriage', as the grotesque parody that it has become today, to any young man living in the US, UK, Canada, or Australia. There are just too many things outside of his control that can catastrophically ruin his finances, emotions, and quality of life.

At a minimum, he should make sure that having children is the most important goal of his life. If not, then he has insufficient reason to enter this contract. If this goal is affirmed, then he should conduct research by speaking to a few divorced men about the laws and mistreatment they were subjected to, and attend a few divorce court hearings at the local courthouse. After gaining this information, if he still wants to take the risk, he should only marry if he can meet the following three conditions, none of which can substitute either of the other two :

1) The woman earns the same as, or more than, he does.

2) He has a properly done pre-nuptial arrangement with lawyers on each side (even though a pre-nup will not affect the worst aspect of divorce law - 'child support' as a cloak for stealth alimony and possible imprisonment).

There are still substantial risks, but at least they are somewhat reduced under these conditions. If marriage is a very important goal for a young man, he should seriously consider expatriation to a developing country, where he ironically may have a higher living standard than in the US after adjusting for divorce risk.

So, to review, the differences between Marriage 1.0 and Marriage 2.0 are :

a) No fault asset division and alimony, where the abandoned spouse has to pay if he earns more, even if he did not want a divorce, and even if he is a victim of abuse, cuckolding, or adultery. There are rare instances of high-earning women getting caught in this trap as well.

b) Women marrying after having 5 or more sexual partners, compared to just 0-1 previously. This makes it harder for the woman to form a pair bond with her husband.

c) Women marrying at an age when very few years of their peak beauty are remaining, compared to a decade or more remaining under Marriage 1.0.

d) Child custody is almost never granted to the man, so he loses his children on a 'no fault' basis.

Traditional cultures marketed marriage with such punctilious alacrity that most people today dare not even question whether the traditional truths still apply. Hence, hostility often ensues from a mere attempt to even broach the topic of whether marriage is still the same concept as it once was. Everyone from women to sadistic social conservatives to a young man's own parents will pressure and shame him into marriage for reasons they cannot even articulate, and condemn his request for a pre-nup, without having any interest in even learning about the horrendously unequal and carefully concealed laws he would be subjected to in the event that his wife divorces him through no reasons he can discern. But some men with an eye on self-preservation are figuring this out, and are avoiding marriage. By many accounts, 22% of men have decided to avoid marriage. So what happens to a society that makes it unattractive for even just 20% of men to marry?

Women are far more interested in marriage than men. Simple logic of supply and demand tells us that the institution of monogamous marriage requires at least 80% male participation in order to be viable. When male participation drops below 80%, all women are in serious trouble, since there are now 100 women competing for every 80 men, compounded with the reality that women age out of fertility much quicker than men. This creates great stress among the single female population. In the past, the steady hand of a young woman's mother and grandmother knew that her beauty was temporary, and that the most seductive man was not the best husband, and they made sure that the girl was married off to a boy with long-term durability. Now that this guidance has been removed from the lives of young women, thanks to 'feminism', these women are proving to be poor pilots of their mating lives who pursue alpha males until the age of 34-36 when her desirability drops precipitously and not even beta males she used to reject are interested in her. This stunning plunge in her prospects with men is known as the Wile E. Coyote moment, and women of yesteryear had many safety nets that protected them from this fate. The 'feminist' media's attempt to normalize 'cougarhood' is evidence of gasping desperation to package failure as a desirable outcome, which will never become mainstream due to sheer biological realities. Women often protest that a high number of sexual partners should not be counted as a negative on them, as the same is not a negative for men, but this is merely a manifestation of solipism. A complex sexual past works against women even if the same works in favor of men, due to the natural sexual attraction triggers of each gender. A wise man once said, "A key that can open many locks is a valuable key, but a lock that can be opened by many keys is a useless lock."

The big irony is that 'feminism', rather than improving the lives of women, has stripped away the safety nets of mother/grandmother guidance that would have shielded her from ever having to face her Wile E. Coyote moment. 'Feminism' has thus put the average woman at risk in yet another area.

Game (Learned Attraction and Seduction) : The Four Sirens and the legal changes feminists have instituted to obstruct beta men have created a climate where men have invented techniques and strategies to adapt to the more challenging marketplace, only to exceed their aspirations. This is a disruptive technology in its own right. All of us know a man who is neither handsome nor wealthy, but consistently has amazing success with women. He seems to have natural instincts regarding women that to the layperson may be indistinguishable from magic. So how does he do it?

Detractors with a vested interest in the present status quo are eager to misrepresent what 'Game' is, and the presence of many snake-oil salesmen in the field does not help, but as a definition :

The traits that make a man attractive to women are learnable skills, that improve with practice. Once a man learns these skills, he is indistinguishable from a man who had natural talents in this area. Whether a man then chooses to use these skills to secure one solid relationship or multiple brief ones, is entirely up to him.

The subject is too vast for any description over here to do it full justice, but in a nutshell, the Internet age enabled communities of men to share the various bits of knowledge they had field tested and refined (e.g. one man being an expert at meeting women during the daytime, another being an expert at step-by-step sexual escalation, yet another being a master of creating lasting love, etc.). The collective knowledge grew and evolved, and an entire industry to teach the various schools of 'Game' emerged. Men who comprehended the concepts (a minority) and those who could undertake the total reconstitution of their personalities and avalanche of rejections as part of the learning curve (a still smaller minority) stood to reap tremendous benefits from becoming more attractive than the vast majority of unaware men. While the 'pick-up artist' (PUA) implementation is the most media-covered, the principles are equally valuable for men in monogamous long-term relationships (LTRs). See Charlotte Allen's cover story for The Weekly Standard, devoted to 'Game'.

Among the most valuable learnings from the body of knowledge is the contrarian revelation that what women say a man should do is often quite the antithesis of what would actually bring him success. For example, being a needy, supplicative, eager-to-please man is precisely the opposite behavior that a man should employ, where being dominant, teasing, amused, yet assertive is the optimal persona. An equally valuable lesson is to realize when not to take a woman's words at face value. Many statements from her are 'tests' to see if the man can remain congruent in his 'alpha' personality, where the woman is actually hoping the man does not eagerly comply to her wishes. Similarly, the 'feminist' Pavlovian reaction to call any non-compliant man a 'misogynist' should also not be taken as though a rational adult assigned the label after fair consideration. Such shaming language is only meant to deflect scrutiny and accountability from the woman uttering it, and should be given no more importance than a 10-year-old throwing a tantrum to avoid responsibility or accountability. Far too many men actually take these slurs seriously, to the detriment of male rights and dignity.

For anyone seeking advice on learning the material, there is one rule you must never break. I believe it is of paramount importance that the knowledge be used ethically, and with the objective of creating mutually satisfying relationships with women. It is not moral to mistreat women, even if they have done the same to countless men. We, as men, have to take the high road even if women are not, and this is my firm belief. Nice guys can finish first if they have Game.

'Feminism' as Unrestrained Misandry and Projection : The golden rule of human interactions is to judge a person, or a group, by their actions rather than their words. The actions of 'feminists' reveal their ideology to be one that seeks to secure equality for women in the few areas where they lag, while distracting observers from the vast array of areas where women are in a more favorable position relative to men (the judicial system, hiring and admissions quotas, media portrayals, social settings, etc.). They will concoct any number of bogus statistics to maintain an increasingly ridiculous narrative of female oppression.

Feminists once had noble goals of securing voting rights, achieving educational parity, and opening employment channels for women. But once these goals were met and even exceeded, the activists did not want to lose relevance. Now, they tirelessly and ruthlessly lobby for changes in legislation that are blatantly discriminatory against men (not to mention unconstitutional and downright cruel). Not satisfied with that, they continue to lobby for social programs designed to devalue the roles of husbands and fathers, replacing them with taxpayer-funded handouts.

As it is profitable to claim victimhood in this age, a good indicator is whether any condemnation by the supposedly oppressed of their oppressor could be similarly uttered if the positions were reversed. We know that what Rev. Jeremiah Wright said about whites could not be said by a white pastor about blacks, and we see even more of a double standard regarding what women and men can say about each other in America today. This reveals one of the darkest depths of the human mind - when a group is utterly convinced that they are the 'victims' of another group, they can rationalize any level of evil against their perceived oppressors.

Go to any major 'feminist' website, such as feministing.com or Jezebel.com, and ask polite questions about the fairness of divorce laws, or the injustice of innocent men being jailed on false accusations of rape without due process. You will quickly be called a 'misogynist' and banned from commenting. The same is not true for any major men's site, where even heated arguments and blatant misandry are tolerated in the spirit of free speech and human dignity. When is the last time a doctrinaire 'feminist' actually had the courage to debate a fair woman like Camille Paglia, Tammy Bruce, or Christina Hoff Somers on television?

Ever-tightening groupthink that enforces an ever-escalating narrative of victimhood ensures that projection becomes the normal mode of misandrist thought. The word 'misogynist' has expanded to such an extreme that it is the Pavlovian response to anything a 'feminist' feels bad about, but cannot articulate in an adult-like manner. This reveals the projected gender bigotry of the 'feminist' in question, which in her case is misandry. For example, an older man dating women 10 years younger than him is also referred to as a 'misogynist' by the older bitterati. Not an ageist, mind you, but a misogynist. A man who refuses to find obese women attractive is also a 'misogynist', as are gay men who do not spend money on women. The male non-compliance labeled as 'misogyny' thus becomes a reaction to many years of unopposed misandry heaped on him first, when he initially harbored no such sentiments. Kick a friendly dog enough times, and you get a nasty dog.

This is pure evil, ranking right up there with the worst tyrannies of the last century. Modern misandry masking itself as 'feminism' is, without equal, the most hypocritical ideology in the world today. The laws of a society are the DNA of that society. Once the laws are tainted, the DNA is effectively corrupted, and mutations to the society soon follow. Men have been killed due to 'feminism'. Children and fathers have been forcibly separated for financial gain via 'feminism'. Slavery has returned to the West via 'feminism'. With all these misandric laws, one can fairly say that misandry is the new Jim Crow.

Contrary to their endless charges of 'misogyny' (a word that many 'feminists' still manage to misspell), in reality, most men instinctively treat women with chivalry and enshrine them on exalted pedestals. Every day, we see men willing to defend women or do favors for them. There is infinitely more chivalry than misogyny exhibited by the male population. On the other hand, we routinely see anti-male statements uttered by 'feminists', and a presumption that all men are monsters guilty of crimes committed by a small number of people of the same gender. When well-known 'feminists' openly state that 90% of the male population should be exterminated, the unsupported accusation of 'misogyny' is a very pure manifestion of their own misandric projection.

On the second charge of being a 'loser who cannot get laid', any observation of the real world quickly makes it obvious that men who have had little experience with women are the ones placing women on pedestals, while those men who have had substantial sexual experience with women are not. Having sex with a large number of women does not increase respect for women, which is the exact opposite of the claim that 'feminists' make. Again, this charge of 'loserdom' is merely the psychosexual frustration of 'feminists' projected outwards, who express surprise that unrelenting hatred by them towards men is not magically metabolized into love for these particular 'feminists'.

That misandrists are so unchallenged is the reason that they have had no reason to expand their arsenal of venom beyond these two types of projection. Despite my explanation of this predictable Pavlovian response, the comments section will feature misandrists use these same two slurs nonetheless, proving the very point that they seek to shout down, and the very exposure they seek to avoid. My pre-emption will not deter them from revealing their limitations by indulging in it anyway. They simply cannot help themselves, and are far from being capable of discussing actual points of disagreement in a rational manner.

Men, of course, have to be savvy about the real reason their debate skills are limited to these two paths of shaming language, and not be deterred. Once again, remember that this should be taken no more seriously than if uttered by a 10-year-old, and there is no reason to let a 'feminist' get away with anything you would not let a man get away with. They wanted equality, didn't they?

'Feminism' as Genuine Misogyny : The greatest real misogyny, of course, has been unwittingly done by the 'feminists' themselves. By encouraging false rape claims, they devalue the credibility of all claims, and genuine victims will suffer. By incentivizing the dehumanization of their ex-husbands and the use of children as pawns, they set bad examples for children, and cause children to resent their mothers when they mature. By making baseless accusations of 'misogyny' without sufficient cause, they cause resentment among formerly friendly men where there previously was none. By trying to excuse cuckolding and female domestic violence, they invite formerly docile men to lash out in desperation.

One glaring example of misandry backfiring is in the destruction of marriage and corresponding push of the 'Sex in the City/cougar' fantasy. Monogamous marriage not only masked the gap between 'alpha' and 'beta' men, but also masked the gap between attractiveness of women before and after their Wile E. Coyote moment. By seducing women with the myth that a promiscuous single life after the age of 35 is a worthy goal, many women in their late 30s are left to find that they command far less male attention than women just a decade younger than them. 'Feminism' sold them a moral code entirely unsuited to their physical and mental realities, causing great sadness to these women.

But most importantly, 'feminists' devalued the traditional areas of female expertise (raising the next generation of citizens), while attaching value only to areas of male expertise (the boardroom, the military, sexual promiscuity) and told women to go duplicate male results under the premise that this was inherently better than traditional female functions. Telling women that emulating their mothers and grandmothers is less valuable than mimicking men sounds quite misogynistic to me, and unsurprisingly, despite all these 'freedoms', women are more unhappy than ever after being inflicted with such misogyny.

So how did the state of affairs manage to get so bad? Surely 'feminists' are not so powerful?

Social Conservatives, White Knights, and Girlie-Men : It would be inaccurate to deduce that misandrists were capable of creating this state of affairs on their own, despite their vigor and skill in sidestepping both the US Constitution and voter scrutiny. Equally culpable are men who ignorantly believe that acting as obsequious yes-men to 'feminists' by turning against other men in the hope that their posturing will earn them residual scraps of female affection.

Chivalry has existed in most human cultures for many centuries, and is seen in literature from all major civilizations. Chivalry greatly increased a man's prospects of marriage, but the reasons for this have been forgotten. Prior to the modern era, securing a young woman's hand in marriage usually involved going through her parents. The approval of the girl's father was a non-negotiable channel in the process. If a young man could show the girl's parents that he would place her on a pedestal, they could be convinced to sanction the union. The girl herself was not the primary audience of the chivalry, as the sexual attraction of the girl herself was rarely aroused by chivalry, as the principles of Game have shown.

For this reason, after lunatic 'feminists', these pedestalizing White Knights are the next most responsible party for the misandry in Western society today. The average woman is not obsessively plotting new schemes to denigrate and swindle men, she merely wants to side with whoever is winning (which presently is the side of misandry). But pedestalizing men actually carry out many dirty deeds against other men in the hopes of receiving a pat on the head from 'feminists'. Hence, the hierarchy of misandric zeal is thus :

Strident 'feminist' > pedestalizer/white knight > average woman.

For reasons described earlier, even a declaration that many men are bigger contributors to misandry than the average woman will not deter 'feminists' from their Pavlovian tendency to call articles such as this one 'misogynist'.

Lastly, the religious 'social conservatives' who continue their empty sermonizing about the 'sanctity of marriage' while doing absolutely nothing about the divorce-incentivizing turn that the laws have taken, have been exposed for their pseudo-moral posturing and willful blindness. What they claim to be of utmost importance to them has been destroyed right under their noses, and they still are too dimwitted to comprehend why. No other interest group in America has been such a total failure at their own stated mission. To be duped into believing that a side-issue like 'gay marriage' is a mortal threat to traditional marriage, yet miss the legal changes that correlate to a rise in divorce rates by creating incentives for divorce (divorce being what destroys marriage, rather than a tiny number of gays), is about as egregious an oversight as an astronomer failing to be aware of the existence of the Moon. Aren't conservatives the people who are supposed to grasp that incentives drive behavior? An article worthy of being written by The Onion could conceivably be titled 'Social conservatives carefully seek to maintain perfect 100% record of failure in advancing their agenda'.

Why There is No Men's Rights Movement : At this point, readers may be wondering "If things are this bad, why don't we hear anything about it?". Indeed, this is a valid question, and the answer lies within the fundamentals of male psychology. Most beta men would rather die than be called a 'loser' by women (alpha men, of course, know better than to take this at face value). White Knights also join in the chorus of shaming other men since they blunderously believe that this is a pathway to the satiation of their lust. So an unfairly ruined man is faced with the prospect of being shamed by women and a large cohort of men if he protests about the injustice, and this keeps him suffering in silence, leading to an early death. We have millions of fine young men willing to die on the battlefield to defend the values enshrined in the US Constitution, but we don't see protests of even 100 divorced men against the shamefully unconstitutional treatment they have received. The destruction of the two-parent family by incentivizing immoral behavior in women is at least as much of a threat to American safety and prosperity as anything that ever could have come out of Afghanistan, Pakistan, Iran, or Saudi Arabia. Men being too afraid to be the 'squeaky wheel' even when they have lost their children and their present and future assets is a major contributor to the prevailing status quo. Alpha men have no incentive beyond altruism to act as they benefit from the current climate, and thus my altruism will be limited to putting forth these ideas.

Any serious movement has to start a think tank or two to produce research reports, symposiums, and specific policy recommendations, and the few divorce lawyers who were compelled by their conscience to leave the dark side have to be recruited as experts. Subsequently, televised panel discussions have to be conducted at top medical, business, and graduate engineering schools (where young men about to embark on lucrative careers are approaching marriage age, but know nothing about the law), documentary films have to be produced, prominent victims like Mel Gibson, Paul McCartney, Hulk Hogan, and Tiger Woods have to be recruited as spokesmen, and visibly powerful protests outside of divorce courts have to be organized. In this age of Web 2.0/social media/viral tools, all this should be easy, particularly given how quickly leftist groups can assemble a comparable apparatus for even obscure causes.

Instead, all that exists are Men's Rights Authors (MRAs) that run a few websites and exchange information on their blogs. 'Something is better than nothing' is the most generous praise I could possibly extend to their efforts, and this article I am presenting here on The Futurist is probably the single biggest analysis of this issue to date, even though this is not even a site devoted to the subject and I am not the primary author of this site. Hence, there will be no real Men's Rights Movement in the near future. The misandry bubble will instead be punctured through the sum of millions of individual market forces.

The Faultline of Civilization : After examining all the flaws in modern societies, and the laws that exacerbate them, it becomes apparent that there are two realms of legal/judicial thought that stand alone in determining whether our civilization is going to ever-improving or merely cyclical. These two legal areas are a) the treatment of paternity rights, and b) the treatment of due process in rape accusations. The human brain is wired to value the well-being of women far higher than that of men (for reasons that were once valid, but no longer are today), which is why extending due process to a man falsely accused of rape is not of particular interest to people who otherwise value due process. Similarly, there is little resistance to 'feminist' laws that have stripped away all types of paternity rights from fathers. The father is not seen as valuable nor as worthy of rights, as we have seen above. These two areas of law are precisely where our society will decide if it ascends or declines. All other political sideshows, like immigration, race relations, and even terrorism are simply not as important as none of those can destroy an entire society the way these laws can.

The Economic Thesis

Ceilings and Floors of Glass :Misandrists shriek about a supposed 'glass ceiling' of pervasive sexism that explains why 50% of the CEOs of major corporations are not women. What is never mentioned is the equally valid 'glass floor', where we see that 90% of imprisonments, suicides, and crippling occupational injuries are of men. If these outcomes are the results of the actions or choices of men who suffer from them, then is that not the same reason that determines who rises above the 'glass ceiling'? The inability of misandrists to address these realities in good faith tells us something (but not everything) about the irrational sense of entitlement they have.

One of the most dishonest myths of all is the claim that 'women earn just 75% of men for the same job'. Let me dispense of this myth, in the process of which we will see why it is profitable and seductive for them to broadcast this bogus belief.

It is true that women, on average, earn less per year than men do. It is also true that 22-year-olds earn less, on average, than 40-year-olds. Why is the latter not an example of age discrimination, while the former is seized upon as an example of gender discrimination?

Furthermore, women entrepreneurs could hire other women and out-compete any male-dominated business if such a pay gap existed, but we do not see this happening in any country in the world. Market forces would correct such mispricings in female compensation, if they actually existed. But they do not, and those who claim that they do are not just advertising an extreme economic illiteracy, but are quite happy to make similarly illiterate women angry about an injustice that does not exist. I notice that women who actually are/were CEOs of publicly traded companies never claim that there is a conspiracy to underpay women relative to their output.

I am willing to pass laws to ensure that 50% of all Fortune 500 CEOs are women, if we also legally mandate that 50% of all imprisonments are of women, and 50% of the jobs that involve working with heavy machinery, being outdoors in inclement weather, inhaling toxic fumes, or apprehending dangerous criminals are also occupied by women. Fair is fair. Any takers?

The 'Mancession' and the 'Sheconomy' : I would be the first to be happy if the economic success of women were solely on the basis of pure merit. For many of them, it is. But far too much has been the result of not market forces or meritocracy, but political graft and ideology-driven corruption.

Maria Shriver, a woman who has the most fortunate of lives from the vast wealth earned first by her grandfather and then by her husband, recently published 'A Woman's Nation : The Shriver Report', consisting of gloating about how women were now outperforming men economically. The entire research report is full of all the standard bogus feminist myths and flawed statistics, as thoroughly debunked here, as well as the outright sexism of statements like 'women are better managers' (imagine a man saying the reverse). Furthermore, the report reveals the typical economic illiteracy (evidenced by, among other things, the ubiquitous 'women are underpaid' myth), as well as belief that businesses exist to act as vehicles of social engineering rather than to produce a profit.

All of this bogus research and organized anti-male lobbying has been successful. As of today, the male unemployment rate is worse than the female unemployment rate by an unprecedented chasm. The 'mancession' continues as the US transitions to a 'sheconomy', and among the millions of unemployed men, some owe prohibitive levels of 'child support' despite not being the ones wanting to deprive their children of a two-parent household, landing in prison for lack of funds. Furthermore, I emphasize again that having 10-30% of the US male workforce living under an effective 70% marginal tax rate will kill their incentives for inventing new technologies or starting new companies. It is petty to debate whether the top federal income tax bracket should be 35% or 39.6%, when a slice of the workforce is under a 70% tax on marginal income. Beyond the tyranny of this, it also costs a lot of taxpayer money to jail a growing pool of unemployed men. Clearly, moving more and more men out of a tax-generating capacity and into a tax-consuming capacity is certainly going to do two-fold damage to governmental budgets. The next time you hear someone say that 'the US has the largest prison population in the world', be sure to mention that many of these men merely lost their jobs, and were divorced against their will. The women, in the meantime, are having a blast.

The Government Bubble : While public sector vs. private sector workforce distribution is not highly correlated to gender, it is when the focus is on women earning over $100,000 or more. This next chart from the Cato Institute shows that when total compensation (wages + benefits) are taken into account, the public sector has totally outstripped the private sector this decade. Has the productivity of the typical government employee risen so much more than that of the private worker, that the government employee is now paid twice as much? Are taxpayers receiving value for their money?

It goes further. The vast majority of social security taxes are paid by men, but are collected by women (due to women living 7 years longer than men on average). That is not troubling by any means, but the fact that women consume two-thirds of all US healthcare, despite most of this $2.5 Trillion annual expenditure being paid by men, is certainly worthy of debate. It may be 'natural' for women to require more healthcare, since they are the ones who give birth. But it was also 'natural' for men to finance this for only their wives, not for the broader community of women. The healthcare profession also employs an immense number of women, and not just in value-added roles such as nursing, but even in administrative and bureaucratic positions. In fact, virtually all government spending except for defense and infrastructure, from Medicare to Obamacare to welfare to public sector jobs for women to the expansion of the prison population, is either a net transfer of wealth from men to women, or a byproduct of the destruction of Marriage 1.0. In either case, 'feminism' is the culprit.

This Cato Institute chart of Federal Government spending (click to enlarge) shows how non-defense expenditures have steadily risen since 1960. The decline in defense spending, far from being a 'peace dividend' repatriated back to taxpayers, was used to fund more social programs. No one can seriously claim that the American public receives better non-defense governance in 2010 than in 1960 despite the higher price, and as discussed earlier, most of this increase is a direct or indirect result of 'feminism'. When state and local government wastage is added to this, it would appear that 20% of GDP is being spent just to make the government a substitute for the institution of Marriage, and yet still has not managed to be an effective replacement. Remember again that the earnings of men pays 70%-80% of all taxes.

The left has finally found a perfect Trojan Horse through which to expand a tyrannical state. 'Feminists' can lobby for a transfer of wealth from men to women and from private industry to the government, while knowing that calling any questioner a 'misogynist' will silence him far more effectively than their military fifth columnist and plain socialist brethren could ever silence their respective opponents. Conservatives are particularly vulnerable to such shaming language, and most conservatives will abandon their stated principles to endlessly support any and all socialism if it can be packaged as 'chivalry', the opposition to which makes one a 'misogynist'. However, there is reason to believe that tax collection in many parts of the US, such as in states like CA, NY, NJ, and MA, has reached saturation. As the optimal point has already been crossed, a rise in tax rates will cause a decrease, rather than an increase in revenue, and the increase in Federal tax rates exactly one year from today on 1/1/2011 is likely to cause another recession, which will not be so easily transferred to already-impoverished men the next time.

When men are severed from their children with no right to obstruct divorce, when they are excluded from the labor market not by market forces but rather by social engineering, and when they learn that the society they once believed in and in some cases joined the military to protect, has no respect for their aspirations, these men have no reason to sustain such a society.

The Contract Between the Sexes : A single man does not require much in order to survive. Most single men could eke out an adequate existence by working for two months out of the year. The reason that a man might work hard to earn much more than he needs for himself is to attract a wife amidst a competitive field, finance a home and a couple of children, and ultimately achieve status as a pillar of the community. Young men who exhibited high economic potential and favorable compatibility with the social fabric would impress a girl's parents effectively enough to win her hand in marriage. The man would proceed to work very hard, with the fruits of his labor going to the state, the employer, and the family. 80-90% of a man's output went to people other than himself, but he got a family and high status in return, so he was happy with the arrangement.

The Four Sirens changed this, which enabled women to pursue alpha males despite the mathematical improbability of marrying one, while totally ignoring beta males. Beta males who were told to follow a responsible, productive life of conformity found that they were swindled.

Men who excelled under the societal rules of just two decades ago are often left totally betrayed by the rules of today, and results in them refusing to sustain a society heavily dependent on their productivity and ingenuity. Women believed that they could free themselves from all their traditional obligations (only to find, amusingly, that they are unhappier now than they were then), while men would still fulfill all of their traditional obligations, particularly as bankrollers of women and protectors of women. Needless to say, despite the chivalry ground into men, eventually, they will feel that chivalry requires a level of gratitude that is not forthcoming.

To see what happens when the role of the husband and father is devalued, and the state steps in as a replacement, look no further than the African American community. In Detroit, the average home price has fallen from $98,000 as recently as 2003 to just $14,000 today. The auto industry moved jobs out of Detroit long before 2003, so the decline cannot be attributed to just industrial migration, and cities like Baltimore, Oakland, Cleveland, and Philadelphia are in scarcely better shape. For those who believe that this cannot happen in white communities, have a look at the white underclass in Britain. The lower half of the US white population is vulnerable to the same fate as the black community, and cities like Los Angeles are perilously close to 'Detroitification'.

Additionally, people seem to have forgotten that the physical safety of society, particularly of women, is entirely dependent on ratio of 'aggressor' men to 'protector' men staying below a certain critical threshold. As more men get shut out of the labor market, crime becomes an alternative. Even highly educated men who feel betrayed can lash out, and just about every shooting spree and every recent terrorist attempt in the West was by men who were educated and had good career prospects, but were unloved.

While professional men will certainly never resort to crime, what they could resort to is an unwillingness to aid a damsel in distress. More men will simply lose interest in being rescuers, and this includes policemen who may also feel mistreated by the prevailing misandry. Safety is like air - it is only noticed when it is gone. Women have a tremendous amount to lose by creating a lot of indifferent men.

Patriarchy works because it induces men and women to cooperate under their complementary strengths. 'Feminism' does not work, because it encourages immoral behavior in women, which eventually wears down even the durable chivalry of beta men, making both genders worse off. It is no secret that single motherhood is heavily subsidized, but it is less understood that single spinsterhood is also heavily subsidized through a variety of unsustainable and unreciprocated means. The default natural solution is for the misandric society to be outcompeted and displaced.

Population Displacement : So we have arrived at a society where 'feminists' feel that they are 'empowered', 'independent', and 'confident', despite being heavily dependent on taxes paid mostly by men, an unconstitutional shadow state that extracts alimony and 'child support' from men, an infrastructure maintained by men, technologies invented by men, and a level of safety that men agree to maintain. So exactly what has society received from this population of women who are the most privileged class of humans ever to have lived?

Now, let me be clear; I believe a woman should get to decide how many children she bears, or even whether or not to have any children at all. However, a childless old woman should not then be able to extract resources from the children of other women. Fair is fair, and the obligation of working-age people to support the elderly should not be socialized in order to subsidize women who chose not to reproduce.

Let us take a hypothetical example of three 20-year-old single women, one who is an urban lefto-'feminist', one who is a rural conservative, and one who is a devout Muslim. The following table charts the parallel timelines of their lives as their ages progress in tandem, with realistic estimates of typical life events. When people talk about falling birth rates in the West, they often fail to account for the additional gap caused by having children at age 23 vs. at age 33. As the table shows, a 1:1:1 ratio of three young ladies takes only 40 years to yield a 12:4:0 ratio of grandchildren. Consider, also, that we are already 20 years into this 40-year process, so each of these women are 40 years old today.

So how do we estimate the value society will ultimately receive from organizing itself in a manner that young women could choose a life of bar-hopping, shopping for $300 purses, and working as government bureaucrats to make the government a more complete husband substitute? If the sight of a pitiful 60-year-old Code Pink harpy lecturing 12 Muslim adolescents that 'gender is a social construct' seems amusing, then let us move on to the macro chart. This world map(click to enlarge) shows how many children under the age of 15 existed in the major countries of the world in 2005 (i.e. born between 1990 and 2005), in proportion to the country with the most children. Notably, Mexico and the US have the same number of children, while Pakistan and Bangladesh each have about as many as all of Western Europe. While developing countries are seeing their fertility rates converge to Western levels, the 1990-2005 births already seal certain realities. Needless to say, if we move time forward just 15 years, the proportions in this chart reflect what the proportions of adults aged 20-35 (the female reproductive years) will be per nation in the year 2025. Even the near future belongs to those who show up.

Lefto-'feminists' will be outbred and replaced very quickly, not by the conservatives that they hate, but by other cultures antithetical to 'feminism'. The state that lefto-'feminists' so admire will quickly turn on them once the state calculates that these women are neither producing new taxpayers nor new technologies, and will find a way to demote them from their present 'empowered' position of entitlement. If they thought having obligations to a husband was such an awful prospect, wait until they have obligations to the husband-substitute state.

The Fabric of Humanity Will Tear

Humans like ourselves have been around for about 100,000 years, and earlier hominids similar to us for another 1-3 million years before that. For the first 99.99% of humanoid existence, the primary purpose of our species was the same as that of every other species that ever existed - to reproduce. Females are the scarcer reproductive resource, since the number of babies that can be produced does not fall even if most men die, but it does fall for each woman that dies (humans did not live much past age 40-45 in the past, as mentioned earlier). For this reason, the human brain continued the evolutionary hardwiring of our ancestors, placing female well-being at a premium while males remain expendable. Since funneling any and all resources to women closely correlated with the survival of children, this was a natural priority, with both men and women seeing this status quo as normal. The Female Imperative (FI) was the human imperative.

As human society progressed, priorities adjusted. For one thing, advances in technology and prosperity ensured that child mortality fell from about 50% to very low levels, so 12 births were no longer needed to produce 6 children who reach adulthood. Secondly, as humans moved away from agriculture into a knowledge-based economy, the number of children desired fell, and almost all high and middle-income countries have birth rates lower than 2 as of today, with many women producing zero children. Thirdly, it has become evident that humans are now the first species to produce something more than just offspring; humans now produce technology. As a result, the former direct correlation between funneling resources to women and the survival of children, is no longer true. It was true for 99.99% of our existence, but for the first time, it now no longer is.

Yet, our hardwired brains have not adapted to this very recent transformation, and perhaps cannot adapt. Women are programmed to extract resources endlessly, and most men are programmed to oblige. For this once-valid but now obsolete biological reason, society still funnels the vast majority of resources to women. But instead of reaching children, this money now finds its way into consumer products geared towards women, and a shadow state designed to transfer all costs and consequences away from women. Most people consider our existing society to be normal, but they have failed to observe how many resources are poured into women for a reason that is now obsolete. In the 21st century, there is no reason for any resource distribution, if there must be one at all, to be distributed in any manner other than 50-50.

Go to any department store or mall. At least 90% of the products present there are ones no ordinary man would consider buying. Yet, they occupy valuable shelf space, which is evidence that those products do sell in volume. Who buys them? Look around in any prosperous country, and we see products geared towards women, paid for by money that society diverted to women. From department store products, to the proliferation of take-out restaurants, to mortgage interest, to a court system rigged to subsidize female hypergamy, all represent the end product of resources funneled to women, for a function women have greatly scaled back. This is the greatest resource misallocation ever, and such malinvestment always results in a correction as the bubble pops.

This is not to suggest that we should go back to birth rates of 12, for that is neither desirable nor necessary. The bigger picture here is that a major aspect of the human psyche is quite obsolete, with men and women both culpable. When this situation corrects, it will be the most disruptive event humanity has ever faced. Some call this a variant of the 'Technological Singularity', which will happen much later than 2020 (more like 2060-65), but even prominent thinkers steer clear of any mention of the obvious correction in gender-tilted resource flows that will occur.

The Four Horsemen of Male Emancipation

We earlier examined how the Four Sirens of Feminism unexpectedly combined and provided women with choices they never could have dreamed of before. Some women made positive contributions to society, but quite a few let misandry and unrestrained greed consume them, and have caused the disastrous situation we presently see. Technology always causes disruption in the status quo, always creating new winners and losers with each wave. In centuries past, Gloria Steinem would be a governess and Mystery would be a court jester.

The title of this article is not the 'Misandry Crisis' or even 'The War on Misandry'. It is 'The Misandry Bubble', because the forces that will ensure the demise of the present mistreatment of men are already on the horizon. So allow me to introduce the Four Horsemen of Male Emancipation as a coalescence of many of the forces we have discussed, which will shred the present, unsustainable hierarchal order by 2020 :

1)Game : Learning the truth about how the female mind works is a precious and transcendant body of knowledge for any man. Whether he uses it to become a fully immersed pick-up artist, to create a soulmate bond in a lifelong monogamous marriage, or even to engage in only infrequent yet efficient trysts with women, a man is free from the crushing burdens that uninitiated beta men are capitulating under.

When a man learns that there is no reason for him to buy a $50,000 car, $20,000 ring, $50,000 bridezilla festival, overpriced house contrary to any logical financial analysis, or a divorce lawyer to save him from ruin even though he was the victim of spousal abuse, there is no greater feeling of liberation and jubilation, equating to a windfall of $2 Million for all objective and subjective purposes. When a man realizes that reducing his income by half will now have little detriment to his sexual prospects, he can downsize to an easier job with a shorter commute and lower stress. When a man learns that appeasing a woman is the exact opposite of what he should be doing during the process of romancing and seducing her, that entire humiliating gauntlet of rituals can be jettisoned.

The ecstasy of two or even three concurrent relationships with women of substantially above average beauty are quite attainable to a man who has scaled the summit, which further deprives the hapless betas (again, male attractiveness to women is zero-sum in a way that female attractiveness to men is not). Thus, while 80% of men have no intellectual capacity to grasp and master Game, if the number of solid practitioners even begins to approach 20%, multiple parasitic beasts, from female moochers to the tax-swilling state to the corrupt real-estate and divorce lawyer industries, can be effectively starved.

2) Adult Entertainment Technologies of 2020 : What of the 80% of men who cannot conceptualize or master the core skills of Game? Won't they be condemned to live a life of frustration, humiliation, and near-slavery as second class citizens? Thankfully, these poor souls will experience a satisfactory release through technology, just like women did through technologies such as contraceptive pills, washing machines, and vacuum cleaners.

For a number of reasons, Internet pornography is substantially more addictive to the male brain than the VHS cassette or 'Skinimax' content of the 1990s. When yet another generation of technology diffuses into the market, the implications will be profound enough to tear the current sexual market asunder.

For those (mostly women) who claim that the VR sex of 2020 would not be a sufficient substitute for the real thing, that drawback is more than superceded by the inescapable fact that the virtual woman would be made to be a 10/10+ in appearance, while the real women that the typical beta male user has access to would be in the 4-7 range. Real 10 > VR 10 > Real 7, making irrelevant the claim that a virtual 10 is not as good as a real 10 (under 1% of all women), when the virtual 10 is really competing with the majority of women who are 7s and lower. Women are largely unaware how vastly different the male reaction is to a 10 relative to a 7, let alone to women of even lower scores. As single men arrive home from work on Friday evening, they will simply default into their VR immersion, giving a whole new meaning to the concept of 'beta testing'. These sequestered men will be conspicuously absent from the bars and nightclubs that were the former venues of expenditure and frustration, causing many establishments to go out of business. The brains of these men will warp to the extent that they can no longer muster any libido for the majority of real women. This will cause a massive devaluation in the sexual market value of most women, resulting in 8s being treated like 5s, and 35-year-old women unable to attract the interest of even 55-year-old men. The Wile E. Coyote moment for women will move a few years ahead, and the alphas with Game competence will find an even easier field of desperate women to enjoy.

Another technology making advancements in Japan is that of lifelike female robots. I do not believe that 'sexbots' will be practical or economical relative to software/gaming-derived solutions, simply because such a robot is not competitive with VR on cost, privacy, versatility, and upgradeability.

Some 'feminists' are not blind to the cataclysmic sexual devaluation that women will experience when such technologies reach the market, and are already moving to seek bans. Such bans will not be possible, of course, as VR sex technologies are inseparable from broader video game and home theater technologies. Their attempts to lobby for such bans will be instructive, however.

Another positive ramification of advanced adult entertainment technologies is that women will have to sharpen the sole remaining attribute which technology cannot substitute - the capacity to make a man feel loved. Modern women will be forced to reacquaint themselves with this ancient concept in order to generate a competitive advantage. This necessity could lead to a movement of pragmatic women conducting a wholesale repudiation of misandry masquerading as 'feminism' that has created this state of affairs, and thus will be the jolt that benefits both men and women.

3) Globalization : The Third Horseman is a vast subject that contains many subtopics. The common theme is that market forces across the world eventually find a way around legislative fences constructed in any one country :

b) Expatriation : While America continues to attract the greatest merit and volume of (legal) immigrants, almost every American man who relocates to Asia or Latin America gives a glowing testimonial about the quality of his new life. A man who leaves to a more male-friendly country and marries a local woman is effectively cutting off a total of three parasites in the US - the state that received his taxes, the potential wife who would take his livelihood, and the industries he is required to spend money on (wedding, diamond, real estate, divorce attorney). Furthermore, this action also shrinks the number of available men remaining in America. The misandrists who project their pathology outward by calling such men 'misogynists' are curiously troubled that these same men are leaving the US. Shouldn't 'feminists' be happy if 'misogynists' are leaving? We thus see yet another example of 'feminists' seeking to steal from men while not providing them any benefit in return.

The more unfair a place becomes, the more we see talented people go elsewhere. When word of US divorce laws becomes common in India and China, this might even deter some future taxpayers from immigrating to America, which is yet another reason the government is losing money to misandry.

c) Medical Tourism : The sum total of donor eggs + IVF + surrogacy costs $150,000 or more in the US, but can be done in India for just $20,000 at top-quality clinics that are building a strong track record. While most customers of Indian fertility clinics are couples, there have been quite a few single men opting to create their own biological babies this way. While this avenue is not for everyone, the ability to have a child for $20,000 (and even two children in parallel with two different surrogates in a two-for-one bundle deal for $35,000) now exists. The poor surrogate mother in India earns more than she could earn in 10 years in her prior vocation of construction or housecleaning. It is a win-win for everyone involved, except for the Western woman who was priced out of the market for marriage to this man.

Medical tourism also prices the US healthcare system out of contention for certain procedures, and the US healthcare system employs a large number of women, particularly in administrative and bureaucratic roles that pay them over twice what they could make in the private sector. Such women will experience what male manufacturing workers did a generation earlier, despite the increasinglly expensive government bubble that has kept these women's inflated salaries safe for so long.

So as we can see, the forces of globalization are far bigger than those propping up the current lop-sided status quo.

4) Male Economic Disengagement and Resultant Tax-Base Erosion : Earlier passages have highlighted how even the most stridently egomaniacal 'feminist' is heavily dependent on male endeavors. I will repeat again that there will never, ever be a successful human society where men have no incentive to aspire to the full maximum of their productive and entrepreneurial capabilities.

The contract between the sexes has been broken in urban America (although is still in some effect in rural America). The 'progressive' income tax scale in the US was levied under the assumption that men who could earn 10 times more than they needed for themselves would always do so, for their families. A man with no such familial aspirations may choose an easier job at lower pay, costing the state more than he costs himself. Less tax revenue not just means fewer subsidies for single mothers and government jobs for women, but less money for law enforcement. Less tax revenue also means fewer police officers, and fewer court resources through which to imprison men. The 'feminist' hypergamous utopia is not self-financing, but is precariously dependent on every beta man working at his full capacity, without which the government bubble, inseparable from the misandry bubble, collapses. Misandry is thus mathematically impossible to finance for any extended period of time. A state with a small government is far more sustainable than a state seeking an ever-expanding government, which then cannot be financed, and descends into a mass of contradictions that is the exact opposite of what the statists intended. See the gangster capitalism that dominates contemporary Russia.

These Four Horsemen will all converge at the end of this decade to transfer the costs of misandry from men onto women, and on 1/1/2020, we will assess how the misandry bubble popped and the fallout that women are suffering under for having made the mistake of letting 'feminists' control their destiny. Note that I did not list the emergence of any Men's Rights Movement as one of the Four Horsemen, as this is unlikely to happen for aforementioned reasons.

For those who dispute the Four Horsemen (I'd like to see their track record of predictions to compare against my own), women had their Four Sirens, and now the pendulum has to swing at the same amplitude in the other direction. Keep the Four Horsemen in mind throughout this decade, and remember what you read here on the first day of 2010.

Who Should Care?

As we leave a decade where the prime threat to US safety and prosperity was Islamic terrorism and enter a decade where the prime threat is misandry, anyone concerned with any of the following topics should take heed :

Anyone with a son, brother, nephew, or mentee entering marriage, particularly without the partial protection of a pre-nuptial agreement. As described earlier, he can be ruined, separated from his children, and jailed in a manner few would suspect could happen in any advanced democracy. The suicide rate of divorced men is shockingly high.

Anyone who agrees that a civilization where most adults are part of two-parent families will always outcompete and displace a civilization where a large portion of adults are not leading two-parent families.

Anyone with minor grandchildren, nieces and nephews, or great-grandchildren. The divorce laws incentivize using children as pawns during divorce, and no serious thinker can dispute the trouble that haunts the children of divorce for years thereafter. 'Feminists' concoct bogus research about the role of the father being superfluous, but observation of real-world examples proves otherwise.

Anyone who owns an expensive home in a community of families. The growing aversion of men for marriage will create fewer new families, and thus fewer buyers for those homes. I remind everyone that if they have 20% equity in their home and an 80% mortgage, even a 20% decline in home prices is a 100% decline in your equity, which might be all of your net worth. Detroit, the first major US city to see a loss of beta male employment prospects, saw the average home price drop from $98,000 as recently as 2003 to just $14,000 today. A decline smaller than this would devastate the net worth of remaining home owners, and can happen in any community of single-family homes. If you own a home, your net worth is inseparably tied to the formation and preservation of two-parent families.

Anyone concerned about rising crime. 72% of African American children are born to single mothers, and the number among white children is approaching 30%. Furthermore, the 'mancession' will eventually ensure that the only means of survival for many men is to form gangs and take valuables by force. Unloved men, who in the past would have been paired with wives, are easy for both gangs and terrorist organizations to recruit.

Anyone concerned about the widening federal and state budget shortfalls and medicare/healthcare costs, for which the state continues to insist on raising taxes rather than cut spending. Fewer men choosing to work the long hours needed to earn high incomes will break the model of the top 10% paying 75% of taxes, and more men being jailed for alimony arrears, not being good enough in bed, or defending himself from spousal violence will drain tax coffers. It costs $60,000 a year to maintain a prisoner.

Any woman who is appalled by the treatment of any woman who deviates from 'feminist' doctrine, and who is troubled by the words and actions of self-proclaimed 'feminists' today. If you believe that every action has an equal and opposite reaction, you should worry about what 'feminists' are courting by kicking a friendly dog too many times.

Lastly, anyone with a young daughter or sister, who is about to enter a world where it is much harder for all but the most beautiful women to marry, where the costs of crazed 'feminism' are soon going to be transferred away from men and onto women, even if she had no interest in this doctrine of hate. As stated in the Executive Summary at the start, 'feminists' are leading average women into the abyss.

I could list even more reasons to care, but the point is clear. The biggest challenge of the decade is summarized before us.

Update (7/1/2012) : On this day, July 1, 2012, exactly 25% of the decade described in this article has passed. I did not include a poll on the original launch date of 1/1/2010, as the concepts described here were too radical for the majority of readers. But now that these ideas have become more mainstream, I can include a simple poll on the subject of whether we are indeed in a Misandry Bubble (poll closed after 60 days).

Conclusion

I am just an observer, and will not become an activist of any sort, although, as described earlier, being an 'inactivist' in the spirit of Mahatma Gandhi is also powerful. As a Futurist, I have to predict things before they become obvious to everyone else. Regular readers know of my track records of predictions being accurate, and heed my words when I say that the further inflation and subsequent precipitous deflation of the misandry bubble will define the next American decade. So here, on the first day of the '201x' decade, I am unveiling the article that will spawn a thousand other articles.

This website has predicted that the US will still be the only superpower in 2030, and while we are not willing to rescind that prediction, I will introduce a caveat that US vitality by 2030 is contingent on a satisfactory and orderly unwinding of the Misandry Bubble. It remains to be seen which society can create economic prosperity while still making sure both genders are treated well, and the US is currently not on the right path in this regard. For this reason, I am less confident about a smooth deflation of the Misandry Bubble. Deflate it will, but it could be a turbulent hurricane. Only rural America can guide the rest of the nation into a more peaceful transition. Britain, however, may be beyond rescue.

Note on Comments :Just because I linked to a particular blog does NOT mean that I endorse all of the other views of that author. Are 'feminists' all willing to be responsible for all of the extremism that any other feminist utters (note that I have provided links to 'feminists' openly calling for slavery, castration, and murder of men without proving him guilty of anything)? Also, you will see Pavlovian use of the word 'misogyny' dozens upon dozens of times, so remember what I wrote about the importance of not taking that at face value, as it is merely a manifestation of projected misandry, as well as a defense mechanism to avoid taking responsibility for genuine wrongdoings of 'feminists'.

This is a version 2.0 of a legendary article written here back on March 19, 2006, noticed and linked by Hugh Hewitt, which led to The Futurist getting on the blogosphere map for the first time. Less than four years have elapsed since the original publication, but the landscape of global warfare has changed substantially over this time, warranting an update to the article.

Given the massive media coverage of the minutia of the Iraq War, and the fashionable fad of being opposed to it, one could be led to think that this is one of the most major wars ever fought. Therein lies the proof that we are actually living in the most peaceful time ever in human history.

Just a few decades ago, wars and genocides killing upwards of a million people were commonplace, with more than one often underway at once. Remember these?

We can thus conclude that by historical standards, the current Iraq War was tiny, and can barely be found on the list of historical death tolls. That it got so much attention merely indicates how little warfare is going on in the world, and how ignorant of historical realities most people are.

Why have so many countries quitely adapted to peaceful coexistence? Why is a war between Britain and France, or Russia and Germany, or the US and Japan, nearly impossible today? Why are we not seeing a year like 1979, where the entire continent of Asia threatened to fly apart due to three major events happening at once (Iranian Revolution, Soviet Invasion of Afghanistan, Chinese invasion of VietNam)?

We can start with the observation that never have two democratic countries, with per-capita GDPs greater than $10,000/year on a PPP basis, gone to war with each other. The decline in warfare in Europe and Asia corelates closely with multiple countries meeting these two conditions over the last few decades, and this can continue as more countries graduate to this standard of freedom and wealth. The chain of logic is as follows :

1) Nations with elected governments and free-market systems tend to be the overwhelming majority of countries that achieve per-capita incomes greater than $10,000/year. Only a few petro-tyrannies are the exception to this rule.

2) A nation with high per-capita income tends to conduct extensive trade with other nations of high prosperity, resulting in the ever-deepening integration of these economies with each other. A war would disrupt the economies of both participants as well as those of neutral trading partners. Since the citizens of these nations would suffer financially from such a war, it is not considered by elected officials.

3) As more of the world's people gain a vested interest in the stability and health of the interlocking global economic system, fewer and fewer countries will consider international warfare as anything other than a lose-lose proposition.

4) More nations can experience their citizenry moving up Maslow's Hierarchy of Needs, allowing knowledge-based industries thrive, and thus making international trade continuously easier and more extensive.

5) Since economic growth is continuously accelerating, many countries have crossed the $10,000/yr barrier in just the last 20 years, and so the reduction in warfare after 1991 years has been drastic even if there was little apparent reduction over the 1900-1991 period.

This explains the dramatic decline in war deaths across Europe, East Asia, and Latin America over the last few decades. Thomas Friedman has a similar theory, called the Dell Theory of Conflict Prevention, wherein no two countries linked by a major supply chain/trade network (such as that of a major corporation like Dell Computer), have ever gone to war with each other, as the cost of losing the presence of major industries through war is prohibitive to both parties. If this is the case, then the combinations of countries that could go to war with each other continues to drop quickly.

To predict the future risk of major wars, we can begin by assessing the state of some of the largest and/or riskiest countries in the world. Success at achieving democracy and a per-capita GDP greater that $10,000/yr are highlighted in green. We can also throw in the UN Human Development Index, which is a composite of these two factors, and track the rate of progress of the HDI over the last 30 years. In general, countries with scores greater than 0.850, consistent with near-universal access to consumer-class amenities, have met the aforementioned requirements of prosperity and democracy. There are many more countries with a score greater than 0.850 today than there were in 1975.

Let's see how some select countries stack up.

China : The per-capita income is rapidly closing in on the $10,000/yr threshold, but democracy is a distant dream. I have stated that China will see a sharp economic slowdown in the next 10 years unless they permit more personal freedoms, and thus nurture entrepreneurship. Technological forces will continue to pressure the Chinese Communist Party, and if this transition is moderately painless, the ripple effects will be seen in most of the other communist or autocratic states that China supports, and will move the world strongly towards greater peace and freedom. The single biggest question for the world is whether China's transition happens without major shocks or bloodshed. I am optimistic, as I believe the CCP is more interested in economic gain than clinging to an ideology and one-party rule, which is a sharp contrast from the Mao era where 40 million people died over ideology-driven economic schemes. Cautiously optimistic.

India : A secular democracy has existed for a long time, but economic growth lagged far behind. Now, India is catching up, and will soon be a bulwark for democracy and stability for the whole world. Some of the most troubled countries in the world, from Burma to Afghanistan, border India and could transition to stability and freedom under India's sphere of influence. India is only now realizing how much the world will depend on it. Optimistic.

Russia : A lack of progress in the HDI is a total failure, enabling many countries to overtake Russia over the last 15 years. Putin's return to dictatorial rule is a further regression in Russia's progress. Hopefully, energy and technology industries can help Russia increase its population growth rate, and up its HDI. Cautiously optimistic.

Indonesia : With more Muslims than the entire Middle East put together, Indonesia took a large step towards democracy in 1999 (improving its HDI score), and is doing moderately well economically. Economic growth needs to accelerate in order to cross $10,000/yr per capita by 2020. Cautiously optimistic.

Pakistan : My detailed Pakistan analysis is here.The divergence between the paths of India and Pakistan has been recognized by the US, and Pakistan, with over 50 nuclear warheads, is also where Osama bin Laden and thousands of other terrorists are currently hiding. Any 'day of infamy' that the US encounters will inevitably be traced to individuals operating in Pakistan, which has regressed from democracy to dictatorship, and is teetering on the edge of religious fundamentalism. The economy is growing quickly, however, and this is the only hope of averting a disaster. Pakistan will continue to struggle between emulating the economic progress of India against descending into the dysfunction of Afghanistan. Pessimistic.

Iraq : Although Iraq is not a large country, its importance to the world is disproportionately significant. Bordering so many other non-democratic nations, our hard-fought victory in Iraq now places great pressure on all remaining Arab states. The destiny of the US is also interwined with Iraq, as the outcome of the current War in Iraq will determine the ability of America to take any other action, against any other nation, in the future. Optimistic.

Iran : Many would be surprised to learn that Iran is actually not all that poor, and the Iranian people have enough to lose that they are not keen on a large war against a US military that could dispose of Iran's military just as quickly as they did Saddam's. However, the autocratic regime that keeps the Iranian people suppressed has brutally quashed democratic movements, most recently in the summer of 2009. The secret to turning Iran into a democracy is its neighbor, Iraq. If Iraq can succeed, the pressure on Iran exerted by Internet access and globalization next door will be immense. This will continue to nibble at the edges of Iranian society, and the regime will collapse before 2015 even without a US invasion. If Iran's leadership insists on a confrontation over their nuclear program, the regime will collapse even sooner. Cautiously optimistic.

But smaller-scale terrorism is nothing new. It just was not taken as seriously back when nations were fighting each other in much larger conflicts. The 1983 Beirut bombing that killed 241 Americans did not dominate the news for more than two weeks, as it was during the far more serious Cold War. Today, the absence of wars between nations brings terrorism into the spotlight that it could not have previously secured.

Wars against terrorism have been a paradigm shift, because where a war like World War II involved symmetrical warfare between declared armies, the War on Terror involves asymmetrical warfare in both directions. Neither party has yet gained a full understanding of the power it has over the other.

A few terrorists with a small budget can kill thousands of innocents without confronting a military force. Guerilla warfare can tie down the mighty US military for years until the public grows weary of the stalemate, even while the US cannot permit itself to use more than a tiny fraction of its power in retaliation. Developed nations spend vastly more money on political and media activites centered around the mere discussion of terrorism than the terrorists themselves need to finance a major attack on these nations.

At the same time, pervasively spreading Internet access, satellite television, and consumer brands continue to disseminate globalization and lure the attention of young people in terrorist states. We saw exactly this in Iran in the summer of 2009, where state-backed murders of civilian protesters were videotaped by cameraphone, and immediately posted online for the world to see. This unrelentingly and irreversibly erodes the fabric of pre-modern fanaticism at almost no cost to the US and other free nations. The efforts by fascist regimes to obstruct the mists of the information ethersphere from entering their societies is so futile as to be comical, and the Iranian regime may not survive the next uprising, when even more Iranians will have camera phones handy. Bidirectional asymmetry is the new nature of war, and the side that learns how to harness the asymmetrical advantage it has over the other is the side that will win.

It is the wage of prosperous, happy societies to be envied, hated, and forced to withstand threats that they cannot reciprocate back onto the enemy. The US has overcome foes as formidable as the Axis Powers and the Soviet Union, yet we managed to adapt and gain the upper hand against a pre-modern, unprofessional band of deviants that does not even have the resources of a small nation and has not invented a single technology. The War on Terror was thus ultimately not with the terrorists, but with ourselves - our complacency, short attention spans, and propensity for fashionable ignorance over the lessons of history.

But 44 months turned out to be a very long time, during which we went from a highly uncertain position in the War on Terror to one of distinct advantage. Whether we continue to maintain the upper hand that we currently have, or become too complacent and let the terrorists kill a million of us in a day remains to be seen.

Many of you may be familiar with this sectoral strategy that I have presented, which was due to the unusually wide extreme to which these two sectors had diverged from each other as of April 22, 2008. To review :

Now, it is time to sell the Financials position, and assess the final performance over the entire 18-month period, against the S&P 500.

The purple line indicates the May 20, 2009 transition from being short XLE to covering that short and using the full proceeds to double down on XLF. Note that the short of XLE was profitable, so that the amount that was redeployed to XLF was more than the existing value of the XLF position.

Therefore, the final results are (with all dividends reinvested) :

This strategy yielded a gain of 21.92% vs. a loss of -17.19% for the S&P500. This is a huge gap of almost 40 points, and means that $10,000 deployed to this strategy would have yielded $12,192, vs. just $8,281 if placed in the S&P500 over this period. Also note how the gap widened from what it was on May 20, 2009.

1) 2011 : The tax cuts enacted by President Bush are set to expire at the end of 2010, returning tax brackets to what they were in 2000. Most middle class brackets will rise by 3%, and the top bracket will rise 4.6% from 35% to 39.6%. This is effectively a tax increase that will be upon us in 14 months. At the same time, the Fed Funds rate is at a record low near 0%, and has been for several months. This low interest rate has ended the current recession, but virtually guarantees future inflation. As the Federal Reserve is forced to raise interest rates, liquidity contracts again, the housing prices continue on the correction that was not allowed to complete itself in 2009. A mere rise in the rate back up to 3% could push housing prices down another leg, battering household wealth yet again, and driving yet more people into negative net worth. The housing correction is not fully complete until we have sustained a Fed Funds rate over 3% for at least a year. The timing of this could combine with the tax increase, which would create a joint burden too heavy for the economy to bear, causing a new recession in 2011.

This situation could be avoided easily, by reducing the budget deficit through the quaint notion of spending cuts instead of tax increases that stifle incentives and encumber small businesses. However, barring a seismic shift in the 2010 congressional elections that dispose of many Democrats and replace them with fiscally conservative Republicans (themselves an endangered group within the Republican Party), I do not see the government taking prudent preventive action.

2) ~2017 : For all the uninformed talk about a 'weak dollar', the damage of this will affect nations that export to the US more than the US itself. However, when the PPP per capita GDP of China begins to exceed the world average (by about 2017), then Chinese currency will have to rise to achieve convergence with PPP GDP, effectively adding several trillion dollars to nominal World GDP. This will lead to massive tectonic shifts in the global economy, none of which are destructive, but will result in confusion, for which the immediate reaction will be a US and EU recession (even amidst a rise in World GDP) until all of the following effects are sorted out :

a) The US will see a bout of inflation as prices of Chinese imports rise. At the same time, US exports will surge.

b) Oil prices will briefly spike above $120 as Chinese purchasing power of oil rises, effectively creating greater demand. This will cause short-term pain, followed by longer-term good as described here. Part of the good from an oil spike will be the collapse of many tyrannical petro-regimes, due to burning the candle at both ends, as detailed in the link.

c) Many of the developing countries that neighbor China (which are populated by an additional 2 billion people) will experience the gravitational pull of China's now huge economy, and see a forced currency appreciation long before they are ready. This will cause an unexpected set of changes in India, Pakistan, Bangladesh, VietNam, the Philipines, and Indonesia (these 6 countries containing 2 billion people) as a massive adjustment process will have to occur in a very short time, toppling many industries and creating new ones within these countries.

d) After everything is sorted out, the US and EU will be significantly smaller percentages of World GDP, but the US would see higher GDP growth rates due to a near-elimination of the trade-deficit. Asia, as a region, would have a much larger economy than the EU or North America.

So these are the two possible recessions that the US faces, the first in 2011 and the second in the latter half of the next decade. Prudent fiscal management could sidestep the first, while the second is an inevitable byproduct of the adjustments borne of poverty reduction.

In any event, investment opportunities, and, more importantly, bullet-dodging opportunities abound. In the immediate term, however, if you are considering buying a home in an expensive US area such as New York or California, do not buy one.

Almost 3 years ago, in October of 2006, I first wrote about Cisco's Telepresence technology which had just launched at that time, and how video conferencing that was virtually indistinguishable from reality was eventually going to sharply increase the productivity and living standards of corporate employees (image : Cisco).

At that time, Cisco and Hewlett Packard both launched full-room systems that cost over $300,000 per room. Since then, there has not been any price drop from either company, which is unheard of for a system with components subject to Moore's Law rates of price declines. This indicates that market demand has been high enough for both Cisco and HP to sustain pricing power and improve margins. Smaller companies like LifeSIze, Polycom, and Teleris have lower-end solutions for as little as $10,000, that have also been selling briskly, but have not yet dragged down the Cisco/HP price tier.

In a trend that could transform the way companies do business, Cisco Systems has slashed its annual travel budget by two-thirds — from $750 million to $240 million — by using similar conferencing technology to replace air travel and hotel bills for its vast workforce.

Likewise, Hewlett-Packard says it sliced 30 percent of its travel expenses from 2007 to 2008 — and expects even better results for 2009 — in large part because of its video conference technology.

If Cisco can chop its travel expenses by two-thirds, and save $500 million per year (which increases their annual profit by a not-insignificant 6-10%), then every other large corporation can save a similar magnitude of money. For corporations with very narrow operating margins, the savings could have a dramatic impact on operating earnings, and therefore stock price. The Fortune 500 alone (excluding airline and hotel companies) could collectively save $100 billion per year, in a wave set to begin immediately if either Cisco or HP drops the price of their solution, which may happen in a matter of months. We will soon see that for every $20 that corporations used to spend on air travel and hotels, they will instead be spending only $1 on videoconferencing expenses. This is gigantic gain in enterprise productivity.

Needless to say, high-margin airline revenue from flights between major business centers (such as San Francisco-Taipei or New York-London) will be slashed, and airlines will have to consolidate to fewer flights, making suitability for business travel even less flexible and losing even more passengers. Hotels will have to consolidate, and taxis and restaurants in business hubs will suffer as well. But these are merely the most obvious of disruptions. What is even more interesting are the less obvious ripple effects that only manifest a few years later, which are :

1) Employee Time and Hassle : Anyone who has had to travel to another continent for a Mon-Fri workweek trip knows that the process of taking a taxi to the airport, waiting 2 hours at the airport, the flight itself, and the ride to the final destination consumes most of the weekends on either side of the trip. Most senior executives log over 200,000 miles of flight per year. This is a huge drag on personal time and quality of life. Travel on weekdays consume productive time that the employer could benefit from, which for senior executives, could be worth thousands of dollars per hour. Furthermore, in an era of superviruses, we have already seen SARS, bird flu, and swine flu as global pandemic threats within the last few years. A reduction of business travel will slow down the rate at which such viruses can spread across the globe and make quarantines less inconvenient for business (although tourist travel and remaining business travel are still carriers of this).

2) Real Estate Prices in Expensive Areas : Home prices in Manhattan and Silicon Valley are presently 4X or more higher than a home of the same square footage 80 miles away. By 2015, the single-screen solution that Cisco sells for $80,000 today may cost as little as $2000, and those from LifeSize and others may be even cheaper, so hosting meetings with colleagues from a home office might be as easy as running a conference call. A good portion of employees who have small children may find it possible to do their jobs in a manner than requires them to go to their corporate office only once or twice a week. If even 20% of employees choose to flee the high-cost housing near their offices, the real estate prices in Manhattan and Silicon Valley will deflate significantly. While this is bad news for owners of real-estate in such areas, it is excellent news for new entrants, who will see an increase in their purchasing power. Best of all, working families may be able to afford to have children that they presently cannot finance.

3) Passenger Aviation Technological Leap : Airlines and aircraft manufacturers have little recourse but to respond to these disruptions with innovations of their own, of which the only compelling possibility is to have each journey take far less time. It is apparent that there has been little improvement in the speed of passenger aircraft in the last 40 years. J. Storrs Hall at the Foresight Institute has an article up with a chart that shows the improvements and total flattening of the speed of passenger airline travel. The cost of staying below Mach 1 vs. being above it are very different, as much as 3X, which accounts for the sudden halt in speed gains just below the speed of sound after the early 1960s. However, the technologies of supersonic aircraft (which exist, of course, in military planes) are dropping in price, and it is possible that suborbital passenger flight could be available for the cost of a first-class ticket by 2025. The Ansari X-prize contest and Space Ship Two have already demonstrated early incarnations of what could scale up to larger planes. This will not reverse the video-conferencing trend, of course, but it will make the airlines more competitive for those interactions that have to be in person.

So we are about to see a cascade of disruptions pulsate through the global economy. While in 2009, you may have no choice but to take a 14-hour flight (each way) to Asia, in 2025, the similar situation may present you with a choice between handling the meeting with the videoconferencing system in your home office vs. taking a 2-hour suborbital flight to Asia.

Here at The Futurist, we are two authors. One who contributes on technology, and the other who contributes on political/social topics. Occasionally, we collaborate on a joint article that addresses both of those spheres. This article is one of those.

The United States of America has traditionally been the most economically innovative nation on Earth, and the best place for free-enterprise and self-accomplishment. It still is, but we cannot quite say that with as much certainty as before. Where did we lose our way? Why did America stop being able to dream the greatest dreams, and do the greatest things?

All this can be reversed almost immediately if the US government, private sector, and public really want to, however. There are eight straightforward changes could push US economic growth onto a permanently higher trajectory. These are not short-term stimuli meant to postpone the present malaise, but are ideas that have separately been floating around for a long time, but without a core theme to unify them. These are also not unoriginal ideas (such as raising the retirement age in corelation with rising life expectancy), or unrealistic ideas (such as exporting violent criminals to some poor country to be detained there at low cost), even if those ideas would be effective and popular. Instead, we aim to think bigger. Each idea presented, thus, has to surpass the $1 Trillion mark in direct and indirect benefits, yet still be practical enough to implement immediately (if the mediocrity of the decision-makers in power were not a barrier).

These ideas would usher in a permanent surge in the growth rate for the next 20 years, even though some of them would also bring an immediate burst nonetheless. Most of the ideas are governmental, but there is one idea each for US corporations and for US citizens.

US immigration policy, at present, is exactly the opposite of what it should be. Presently, highly skilled immigrants who seek to follow the law are put through an excruciating process lasting 7-12 years, fraught with restrictions on the changing of employers and the spouse's right to work. At the same time, unskilled immigrants, many with criminal tendencies, have an incentive to enter the US illegally and consume services paid for by the US taxpayer. US prisons are filled with a disproportionate number of unskilled illegal immigrants, while the next Andy Grove, Vinod Khosla, Elon Musk, Pierre Omidyar, and Sergey Brin are faced with a tortuous, interminable ordeal that may lead them to conclude that coming to America is not as worthwhile as it was a generation ago.

If a corporation or a university can choose to accept only the best that it can get, why can't America do the same? We propose that the US allow quick and unlimited immigration for anyone with a bachelor's degree from a recognized university in their country (a list of institutions by country which the US DHS maintains on a website). This will create an influx of about 1,000,000 young, educated immigrants each year into the US, which is still lower than the number of unskilled immigrants, legal plus illegal, entering each year. It takes $200,000 to educate a child from age 4 all the way through completion of a bachelor's degree, so such an influx would effectively create a knowledge import of $200 Billion into the US each year. Only 30% of US citizens have a bachelor's degree, so these immigrants would increase the average educational level and median income of the country. Simultaneously, unskilled immigration, legal and certainly illegal, should be halted/prevented until further notice.

Every problem, from social security shortfalls to a surplus of unsold homes and cars to a lack of engineering and science talent in the US, will be solved. Healthcare cost increases would be contained as the supply of doctors, nurses, and physiotherapists rises. Every distortion caused by an aging population and the retirement of baby boomers will be offset. Political, economic, and even social/familial ties with India and China will strengthen, as most of these skilled immigrants will be from these two countries.

It is just about the most productive economic strategy that the US can employ, and would start taking effect almost immediately. The shockingly uninformed notion that such immigrants 'take jobs away' or 'depress wages' has been debunked in the detailed case, and is a belief held by reactionaries who fail to consider that the same jobs can be offshored out of the US to find their candidates if the candidate is not brought here.

Time is money, and moreso than ever in a prosperous society. Before even discussing the reduction or increase in tax rates, there should first be a reduction in tax complexity. If a family earning $100,000 is currently required to pay $20,000 in income taxes to the Federal Government, so be it. But at least let the process of calculating this tax payment take 20 minutes instead of 20 hours. For a small business, preparing their taxes can consume as much as 80 hours per year. At present, the complexity of the tax code costs the US economy $400 to $600 billion a year in lost productivity and transactional wastage.

Is there any possible argument against this, aside from the need to provide loopholes to favored groups, who themselves still suffer from the complexity of the tax code, outside of their custom loophole? The present morass is a massive burden that is a disgrace to the spirit of free enterprise and unworthy of America.

3) Tax Exemption for Entrepreneurial Innovators : The reason that innovation prizes like the X-Prize are so valuable is that they evoke superlative efforts out of their contestants. This is entirely the opposite of most charities, which merely give ambition-dampening handouts to those deemed to be needy. By some measures, a $10 million X-Prize creates $500 million or more of innovation value.

However, after one team out of dozens of competitors wins a particular X-Prize of $10 Million or so, they have to turn around and pay 45% of it in income taxes. So the real prize is just $5.5 Million. If the IRS were to exempt these innovation prizes from taxation, the cost to the US government would be tiny, relative to the value of innovation that the now-larger prize would inspire.

I would take this concept further, and state that anyone who founds a successful technology company should be exempt from taxes on his shares and stock options. Effectively, a tax cut for creators of jobs, technologies, and wealth, who are known as 'change agents'. Of course, proper restrictions must be made to prevent fraud, but this stimulus would create a tremendous incentive for entrepreneurial innovation, and actually lead to higher overall tax revenue from the surplus of new jobs created, as the employees of these companies are not exempt from taxes.

This is just about the highest gain targeted tax relief that could be employed, and, if combined with idea 1), would bring the most dynamic entrepreneurs to America from across the globe (at least 40% of Silicon Valley startups are founded by immigrants, even today). For an initial cost of less than 0.1% of current tax collections, we could supercharge the economy. History has shown that a society that is unfriendly to entrepreneurship is not a society worth living in, but a society where the entrepreneur is cherished is the best society of all.

4)Make Sarbanes-Oxley Voluntary : The 'SarbOx' compliance requirements make it far more tedious for a young company to go public. For a small public company, SarbOx compliance may cost $3 million per year in auditing and legal fees, which could otherwise be spent on research and development. Even 8 years after the end of the dot-com collapse, the flow of high-tech IPOs remains a trickle, while corruption has arguably not seen any general reduction.

The solution is to make SarbOx compliance voluntary. A corporation can choose to comply, and then let the market decide whether compliance to SarbOx should result in a share price premium, or discount. If a company that has chosen not to comply to SarbOx is later found to have conducted fraud, all other companies will see their decision regarding SarbOx reflected in their prices. If a company that does not spend money on SarbOx instead outcompetes its rivals due to more R&D investment, let the market reflect that as well. The entirely different situations facing blue-chip corporations relative to fresh IPOs can thus be catered to.

5) Reform Divorce Laws : The present laws for the dissolution of marriage have resulted in millions of highly productive workers having a strong incentive not to perform at their full capacity. This is a huge opportunity cost to the economy.

Two single people pay higher combined taxes than a married couple. Beyond this, children who grow up with divorced parents tend to underachieve in many aspects of life, and become liabilities to the taxpayer. Yet, we currently have divorce laws in America that provide perverse incentives for women to leave marriages that traditionally would have been considered acceptable, and consequently for the next generation of men to not enter marriage in the first place. Thus, the percentage of adults in stable marriages continues to shrink. Incentives matter, and the present incentive structure has disastrous long-term implications.

A few decades ago, a person seeking divorce was required to provide significant justification. Now, 'no-fault' divorce grants quick divorce to either party, without any burden of justification. At the same time, the concept of alimony was meant to maintain a woman who did not have any financial security of her own, and to dissuade a man from leaving his family (i.e. when he was at fault). Both of these laws independently had merit in the era that they were passed.

However, both of these combined lead to 'no-fault alimony'. A woman can decide to not work at all while the husband is out working long hours, and still leave him on a 'no-fault' basis and still get payments from him for years, possibly forever if the marriage was long enough. Let me state that again : she decides to leave without having to provide any justification, and he still has to pay her for a very long time after that. This leads to many women abusing the law for financial gain, or at the very least, threaten the husband throughout the marriage, knowing that the power of the state is behind her. Perversely, the dutiful husbands are often the ones ruined by the machinery of the state under the current laws, while the 'bad boys' get off lightly. 70-90% of divorces are initiated by the wife due to this incentive stucture, and while feminists seek to punish 'bad boys', 'players', and 'deadbeats', it is actually the faithful, responsible men who usually suffer.

Given the extreme risks to a man entering marriage in present-day America, more and more younger men are deciding that it is simply not worth the risk. As a result, many good-hearted, average women who want nothing more than to create a picture-perfect family, will find themselves competing for a much smaller pool of men who are willing to marry, and thus many of these women will not find husbands within the window of their youth. Such market forces have accelerated the meteoric rise of the pickup artist (PUA) industry complete with seminars, coaches, blogs, manuals, support networks of 'wingmen', and hidden-camera footage of successful pickups packaged and sold as instructional courses. This is leading to an America of 'more cads, less dads'. While this may be fun for practicing PUAs, it is not a sustainable societal model for any prosperous country. Furthermore, many divorced men are forced to live off just 20% of their original income after being brutalized by the machinery of the state. The natural response from such men would be to not work as hard, but such a disincentive for productive work would be ruinous. As almost all technological inventors are men, why should an inventor paying alimony bother to invent? Why not become a PUA instead, since that is a skill that no one can take away from him?

If America (and other Anglosphere countries) make it too unattractive for men to marry, Anglosphere society will deservedly die. This is where social conservatives have been an abysmal failure, shambolically unable to see the forest from the trees. Their distracted focus on combating issues that are already done deals (abortion) or that affect very few people (gay marriage), while limiting their support of marital commitment to empty sermonizing about how marriage is 'sacred', has meekly ceded the defense of the fabric they hoped to preserve. Their sermonizing, against legally sanctioned financial incentives for divorce combined with growing misandry in the media, is about as effective as a pea shooter against steel.

The solution is to have either no-fault divorce, OR alimony, but certainly not both. Either one by itself may be fair, but the two in combination certainly is not. One of the two, preferably alimony, must end. The second solution is for social conservatives to get their priorities in order, under a new generation of leadership that understands the 21st century social and legal climate.

6) Make Tax Day One Day Before Election Day : The fact that April 15 and the first Tuesday in November are as far apart from each other as they are has itself cost the American taxpayer trillions of dollars, only due to human psychology. If, however, elections were held precisely when the taxpayer is most irate with the wastage of taxpayer funds, fiscal conservatism will immediately become the highest priority of any political candidate.

The recent 'Tea Party' protests are a step in the right direction, but are still too unfocused. If anyone with Tea Party connections is reading this, please consider pitching this idea as a mission to focus the efforts around. All other objectives of tax reduction, spending restraint, and penalties for pork-barrel wastage will automatically flow as downstream outcomes of this. This would enable ideas 2) and 3) to become realities as well. Politicians will resist this, but when cornered into a debate, they will not be able to produce any persuasive excuse that conceals their desire to maintain the profligate status quo.

As you can see, many of these are policies that have existed in America in the past - when America was ascendant. Out of these six, even one or two would create a dramatic economic boom. We have no illusions that the politicians in Washington would implement (indeed, re-implement) any of these ideas, or even have the courage to uproot the entrenched interests that profit from the moribund status quo.

However, US corporations are not blameless in all this. The shortsightedness of many senior executives costs their corporations far more money than an approach that sees beyond merely the next quarter or the end of the fiscal year.

1) A Measured Balance Between Layoffs and Salary Reductions : During economic contractions, headcount reductions are often necessary, and often facilitate the process of creative destruction and reinvention. However, too many corporations are taking an axe, rather than scalpel approach to cost-reduction, that has collateral expenses that they do not account for.

A layoff involves granting 2-12 weeks of severance pay to an employee. When hiring resumes 6-18 months later (the average duration of most recessions), the employer has to spend time interviewing new candidates, paying them a signing bonus, and training them for a couple of months. Even then, the new employee may or may not be a fit for the organization. The whole layoff and re-hiring process has great inefficiencies and large transactional costs, leading to crashes in consumer confidence and then lengthy 'jobless recoveries' in the economy.

There are also hidden costs, born by the former employee and broader society. Divorces rise after layoffs, and the combination of many tragedies at once can often lead to the final tragedy - suicide. The employer bears costs too, as an army of resentful ex-employees can join competitors, tarnish the company's reputation in this Web 2.0 era, or, in the most extreme cases, mentally snap and gun down a few of his former bosses (which does happen from time to time).

At the same time, the concept of temporary salary reductions receives an illogical, knee-jerk dismissal. The stupid claim that it 'discourages top performers' seems to assume that hearing about a divorce, suicide, or foreclosure in the life of your former colleague of many years, or the prospect of a shooting, is somehow not as discouraging.

The solution is very simple : drain the bath water out systematically, rather than throwing the baby out with it. Most corporations have a 5-point performance rating scale, with 5 being the top, 3 being adequate, and 2 or 1 leading to necessary termination. A corporation could simply implement a reduction of 0% for employees rated at '5', 10% for employees rated at '4', 20% for employees rated at '3', for two quarters, before taking the more drastic step of layoffs. If economic conditions stabilize, the salaries can be restored (which itself is quicker and cheaper than recruiting and hiring new employees). If conditions worsen further, only then begin with either a deeper reduction or layoffs.

No one gets divorced or suicidal from the ripple effects of a temporary 20% pay cut. A few may leave, but those are likely to be average performers, and are leaving by their choice (and hence do not get severance pay). In fact, most employees may not even know who got how much of a reduction, due to performance ratings being mostly confidential. The dignity of the employee is preserved, the transaction costs of firing and re-hiring are avoided, and the 'jolt' to the employee, and thus collateral damage in society, is lessened. Thus, the sharp plunge and jobless recovery cycle is greatly moderated, and the drop in consumer confidence that is found at the deepest part of the recession is avoided, which quickens the recovery itself.

Some corporations already do this, and have been more successful than their competitors over cumulative business cycles. But the concept of longer-term planning on this issue is still absent in most large employers, and it is shocking that the value of gradual staging and restoration is not recognized.

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Last but not least, there is an elephant in the room of economic reform. It is that of the US citizen, and one major aspect of the economy that is usually at the top of any list of economic issues.

1) Americans Have to Adopt Healthier Habits: It is hard to go a single day without seeing an article about healthcare reform. However, we did not put it in our list of 6 governmental ideas, as we were never quite convinced that it is entirely the government's responsibility to keep Americans healthy, or to extend their lifespan, despite their abuse of their own health. Too much of our healthcare system is built around treatment, and too little around the prevention of illness in the first place. Personal responsibility to reduce the habits that lead to disease has to be taken by the individual, and so we are going to hold the pudgy feet of the average American to the fire.

While America is the best county in the world in most ways, in terms of dietary health, it sadly is just about the worst. What North Korea and Zimbabwe are to economics, America is to healthy cuisine. So much so, that most Americans don't eat actual food at all, but rather 'food-like substances' as Michael Pollan calls them. Dismantling and rebuilding the American diet will be about as hard as dismantling the USSR and Eastern Bloc.

Cancer, cardiovascular disease, diabetes, and Alzheimer's disease are the four leading causes of death in America. We spend, directly or indirectly, about $2 Trillion a year (15% of GDP) on these four diseases. Yet, a person can greatly reduce their chances of getting all four with some very simple adaptations. For all the anguish about life expectancy not rising quickly enough, and the need for more funding for research, the old adage of a penny of prevention outweighing a pound of cure still applies. US life expectancy would rise by 5 years if all adults did the following :

1) Do not smoke at all, and only drink a little, of either beer or red wine.

3) Make sure that 80% of what you eat is fruits and vegetables of as many different varieties as possible (fresh, not canned). Dairy consumption should be moderate. Red meat should be kept to an absolute minimum (no more than 2 times a month), and should be of the highest quality.

That is it. Do just this, and you will gain both quantity and quality of years. No one disputes the merit of these habits, and most discussion of them centers around why the person in question lacks and discipline or willpower to stick to these habits. The death rates of cancer, cardiovascular disease, and Alzheimer's would plunge, and healthcare costs would be cut in half (saving $1 Trillion/year). Furthermore, since healthier foods are cheaper than unhealthy ones, another $500 Billion will be saved in consumer spending, to be better used elsewhere.

$1.5 Trillion saved per year, as well as 5 more years of life. Yet, Americans can't seem to do it, and often become hostile when it is suggested that this program is easy. It does not make much sense to whine about the lack of a cure for cancer before a person has taken the simple steps that can reduce their chances of getting cancer by 75% or more. More education through some government initiatives is not the answer. That has already been done to the extreme. You can lead a horse to water, and even force its mouth into the water, but you cannot make it drink.

Americans have to get their own health in order first, then talk about the healthcare system meeting them halfway. Currently, the healthcare system is expected to magically undo too many self-inflicted maladies, an admission most Americans are unwilling to make.

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Just eight steps to be taken, six by the government, and one each for corporations and individuals, to create the Golden Age, where US prosperity would triple between now and 2030. All of these ideas have to do with creating better incentive structures, with an underpinning of more personal responsibility. It is so simple, yet so distant.

1) The National Bureau of Economic Research (NBER) will declare the recession to have ended in the window of July-Sept, 2009. However, they only declare this retroactively, several months after the fact. The recession will thus have lasted 20-22 months in total.

2) Employment will bottom at 130 Million jobs, which means that there are still another 3 million jobs to be lost (on top of the 5 million already lost in this recession). This the steepest fall in employment of any recession in the last 50 years, even after adjusting for the size of the workforce.

3) The Unemployment Rate will top out at 10.5% +/- 0.3% early in 2010.

4) Neither deflation nor hyperinflation will happen to any significant degree. No calendar year will have an inflation rate below -2% or above 5%.

A conclusion of the recession, however, does not mean the recovery will be strong. It will take many years for the unemployment rate to fall below 5% again. It is, however, absolutely necessary for Americans to reacquaint themselves with the notions of frugality and delayed gratification, and hopefully this recession has taught a suitable lesson to enough profligate gluttons that better decisions are made in the future.

Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.

- Robert Heinlein

The secret sauce of Silicon Valley is the tradition of leaving established companies to start or join new ones, secure funding from venture capitalists, build the company to a suitable size, and then either float or sell the company for a windfall to the founders and early employees. The incentive to continue this practice is the engine that keeps the fire of human technological innovation alive.

Silicon Valley's unique ecosystem has so far been nearly impossible to eclipse. The combination of research universities, the best and brightest immigrants from India and China, a culture of entrepreneurship, and a nearly perfect climate has kept the competitors to Silicon Valley at bay. In the 1990s, the prevalent belief was that the high cost of living in Silicon Valley would enable Austin, Dallas, Seattle, and Phoenix to attract technology workers and cultivate their own tech sectors. This did not happen, as the Silicon Valley ecosystem just had too strong of a gravitational pull.

This, however, should not be an excuse for complacency, or a belief that Silicon Valley is a bottomless supply of tax revenue. There are four steps that would make Silicon Valley prohibitively inhospitable to the formation of new ventures. Any one of these by itself would not be enough to dent the might of the Silicon Valley engine, but all four combined would exceed the breaking point. The first two of these four steps have already happened, and the final two are set to happen, barring direct intervention.

The four steps are :

1) Sarbanes-Oxley : This attempt to reduce the risk of another Enron-style fraud has inflicted a cost on the US economy greater than 100 Enron collapses. In Silicon Valley, the crushing costs of Sarbanes-Oxley compliance (up to $3M a year) have dried up IPOs to a trickle, as the prospect of spending money of compliance that could otherwise be spent on R&D is unappealing. IPOs are less frequent than they were even in the early 1990s, before the bubble, and start-ups can only hope to be acquired by a larger company. In the last 8 years, only two IPOs were large enough to be considered 'blockbuster' : Google and VMWare. This crushes the incentive to leave stable jobs to go work at a new venture.

2) Tortuous Immigration Process : Any list of the most successful people in the history of Silicon Valley will quickly reveal that at least one third of them were born outside of the US. In response, America has chosen to make it much harder for more such people to come here, even as the quality of life in their home countries is rising.

While politicians pander to illegal immigrants with minimal education, they somehow refuse to make immigration easier for legal, highly-skilled immigrants who start new ventures in America. This is significant given the fact that about half of Silicon Valley's skilled workforce is Indian or Chinese. Many are choosing to return to their home countries in exasperation, and are advising their younger relatives that the US immigration process is so tedious that it is better to pursue their careers at home, working for Indian or Chinese branches of HP or Microsoft.

Under current procedures, an engineer from India or China has to be on an H1-B visa for 6 years before he can get a greencard. If he changes employers during that period, he has to start the clock again. The immigrant's spouse cannot work during this period. Even after the greencard, it takes 5 more years to become a US citizen. Unsurprisingly, the best and brightest are deciding that this 11-year limbo is not worth it, and return to their home countries (eventually starting companies there rather than in Silicon Valley). In the 1990s, Americans had not even heard of Bangalore or Suzhou.

If these two factors weren't bad enough, two more negatives are about to be piled on.

3) California State Income Taxes are Set to Rise : The budget shortfalls and underfunded pensions in California are a ticking time bomb. CalPERS, which invests in many of the top venture capital funds that nurture the growth of start-ups in Silicon Valley, is in a shambolic state, and has to add $80 billion in assets just to meet present obligations. The top income bracket in California is already taxed at 9.3%, and this is set to rise. Sales taxes are also set to rise. Due to this horrendous mismanagement worthy of a banana republic, California will soon reach a tipping point where taxes are so high as to destroy California's private sector, which until now has been the envy of the world. It would, of course, be better to reduce CA state expenditures, but government officials have made it clear that raising taxes is their preferred course of action.

4) Federal Income Taxes are Set to Rise : If the Bush tax cuts are allowed to expire, then from 2011 onwards, the top income bracket will be taxed at 39.6% rather than the current 35%. Here, too, the concept of reducing expenditures is not palatable to Washington decision-makers. While this does affect the entire US equally, when this is combined with the increase in California Sate tax, the combined marginal tax rate in California rises several percentage points, and possibly rises well above 50%.

The danger here is that each of these factors by themselves are not life-threatening. But all four of them in cumulative combination are deadly. So on top of the difficulty of conducting an IPO, and the brain drain out of Silicon Valley back to Asia, if the financial windfall that a worker receives after his startup makes a successful exit is taxed at a grand total of 50-55%, fewer and fewer people will aspire to toil away for years in a startup. As a result, fewer startups will form in Silicon Valley, and instead will form in Bangalore, Shanghai, and Taipei.

Furthermore, after these forces have been in effect for a few years a simple reversal of the higher tax rates, dysfunctional immigration policy, and Sarbanes Oxley will not simply restore Silicon Valley to its prior grandeur. The technology centers in Asia will have achieved critical mass by then, and Silicon Valley will have permanently lost its exclusivity. It would never recover the dominance it once had.

Silicon Valley will be reduced to a location that still hosts the headquarters of HP, Intel, Cisco, and Google, but 90% of the employees of these corporations will be overseas, and startups will be rare. Silicon Valley will effectively become like Cleveland or Pittsburgh, which even today host the headquarters of more than 20 Fortune 500 corporations each, but still have a lower population than they each had in 1960, and cannot attract new young people to come and live there. Cleveland and Pittsburgh are still functioning societies, of course, but their economic vibrancy is irretrievably dead.

This bleak outlook can certainly be reversed if prompt action is taken now. Sadly, the current path is one that is set to have a smothering effect on Silicon Valley.

So how did the portfolio do? Well, the portfolio declined by 37.1% while the S&P500 declined by 36.0%. So we lagged the benchmark by 1.1%. Of course, this was a year when keeping money in cash would have been superior to almost any long equity portfolio.

The longest post-war recession in the US lasted 16 months, so if this recession lasts beyond April of 2009 (which it very well may), it would be the longest post-war recession the US has had. Of course, this recession was shallow for the first 10 months, and only turned sharply lower in October of 2008, so 'duration' is not the whole story.

At present, the consensus is that all of 2009 will effectively be recessionary, putting the recession at 24 months in total duration. Whether this occurs or that pessimism itself is over-shooting remains to be seen.

Recent market turmoil has many wondering when the freefall will cease, and whether we are on the brink of a new Great Depression, which is supposed to happen every 70-80 years according to Kondratieff Wave theory. I don't believe we are on the brink of a depression, even though the present recession is already in its 10th month. But it would be instructive to compare the current situation with prior market corrections, and judge the present situation in a historical context.

We can first start with a chart of the S&P500, from 1950 to today. We can see that the deepest deviations from the trendline appear to be in 1950, 1970, 1974, 1982, 1987, 1990, and 2002. We shall term these instances as historical 'bottoms' for the stock market. All but the 1987 bottom were in the midst of economic recessions.

From this chart, we can see that the time period between bottoms can be irregular, with over a decade passing between them, in some cases. 1974 and 1982 appear to be the deepest corrections. These bottoms coincide with recessions, but interestingly do not coincide with other major crises. The Cuban Missile Crisis, Kennedy assassination, and 9/11/01 did not induce major market crashes beyond the first few days. Now, we can take the datapoints of each of these bottoms, and chart the exponential trendline that connects them. This is purely a chart of index valuation, with dividends not included.

From this chart. we can see that the equivalent value of the S&P500 in 2008, as designated by the red circle, would be around the 1000 level. As of October 10, 2008, the S&P500 is at 899, or 10% below the level of the bottoms trendline. However, we can see that both the 1974 and 1982 bottoms are substantially below the trendline.

The S&P500, since 1950, has delivered an 11.4% average return, with 7.7% of that in the form of a rise in the index itself, and 3.7% of the return being in the form of dividends. If the long-term underlying growth rate of the index is 7.7%, we can chart a 7.7% compounded projection trend from each of these bottoms as another method to compare them to an approximate 2008 equivalent. We shall start this chart from 1970.

It is apparent that 4 of the 6 bottoms cluster around a 2009 projection of 1100-1200, but the two deepest bottoms of 1974 and 1982 project to a 2009 equivalent of only 700-750. These should be considered the two 'mega-bottoms' that happen a couple times per half-century, with the other 4 being only smaller bottoms that happen every 7-10 years, whenever there is a recession.

Since we are presently at 900 for the S&P500, we are about half-way between a smaller bottom and a mega-bottom. Therefore, do not be surprised if the S&P500 does, in fact, dip into the low 700s in 2009, merely to match this correction to 1974/1982 levels. This would be a further 20% correction from the 900 close of October 10, 2008. It may not happen, but it certainly could in terms of historical precedent. This also means that the Dow Jones Industrial Average would simultaneously decline to as low as 6500. Indeed, there is no guarantee that it could not go even lower, but that would he historically unprecedented. Even the 1932 bottom in the Great Depression was not deeper than the 1974 and 1982 bottoms, by these measures.

The Good News :

If the thought of a further 20% decline in the S&P500 or DJIA is depressing, also consider the following :

1) After both the 1974 and 1982 mega-bottoms, the stock market promptly returned at least 60% in the next 9 months. This also happened after the 1932 bottom within the Great Depression.

2) Never forget about dividend reinvestment. Dividend yields are highest when the stock market is at the depths of a bottom, and reinvestment ensures that new shares are purchased at the lower prices. This enables the investor to enhance his returns when the recovery finally commences. Even in the 1970s, the major indices were stuck within a flat range for a decade, but dividend yields as high as 5% enabled total returns that were substantially better.

Considering points 1) and 2), make sure that you are in a position to capture the recovery, and are not forced to sell at the unfavorable prices of the bottom. This means that you must a) never hold any substantial margin debt, b) be positioned across a diversifed set of securities, preferably ETFs ahead of individual stocks, and c) watch as little financial news as possible, thereby reducing your chances of panic that could lead you to take ill-considered actions.

Tremendous profits will be made by those who can steel themselves through this purging of the weak, and are subsequently prepared for the post-bottom recovery. Put daily volatility aside, and enjoy the historical times that we are experiencing first-hand.

The time has thus come for making specific predictions about the details of future economic advancement. I hereby present a speculative future timeline of economic events and milestones, which is a sibling article to Economic Growth is Exponential and Accelerating, v2.0.

2008-09 : A severe US recession and global slowdown still results in global PPP economic growth staying positive in calendar 2008 and 2009. Negative growth for world GDP, which has not happened since 1973, is not a serious possibility, even though the US and Europe experience GDP contraction in this period. The world GDP growth rate trendline resides at growth of 4.5% a year.

2010 : World GDP growth rebounds strongly to 5% a year. More than 3 billion people now live in emerging economies growing at over 6% a year. More than 80 countries, including China, have achieved a Human Development Index of 0.800 or higher, classifying them as developed countries.

2012 : Over 2 billion people have access to unlimited broadband Internet service at speeds greater than 1 mbps, a majority of them receiving it through their wireless phone/handheld device.

2013 : Many single-family homes in the US, particularly in California, are still priced below the levels they reached at the peak in 2006, as predicted in early 2006 on The Futurist. If one adjusts for cost of capital over this period, many California homes have corrected their valuations by as much as 50%.

2014 : The positive deflationary economic forces introduced by the Impact of Computing are now large and pervasive enough to generate mainstream attention. The semiconductor and storage industries combined exceed $800 Billion in size, up from $450 Billion in 2008. The typical US household is now spending $2500 a year on semiconductors, storage, and other items with rapidly deflating prices per fixed performance. Of course, the items puchased for $2500 in 2014 can be purchased for $1600 in 2015, $1000 in 2016, $600 in 2017, etc.

2015 : As predicted in early 2006 on The Futurist, a 4-door sedan with a 240 hp engine, yet costing only 5 cents/mile to operate (the equivalent of 60 mpg of gasoline), is widely available for $35,000 (which is within the middle-class price band by 2015). This is the result of combined advances in energy, lighter nanomaterials, and computerized systems.

2018 : Among new cars sold, gasoline-only vehicles are now a minority. Millions of vehicles are electrically charged through solar panels on a daily basis, relieving those consumers of a fuel expenditure that was as high as $3000 a year in 2008. Some electrical vehicles cost as little as 1 cent/mile to operate.

2019 : The Dow Jones Industrial Average surpasses 25,000. The Nasdaq exceeds 5000, finally surpassing the record set 19 years prior in early 2000.

2020 : World GDP per capita surpasses $15,000 in 2008 dollars (up from $8000 in 2008). Over 100 of the world's nations have achieved a Human Development Index of 0.800 or higher, with the only major concentrations of poverty being in Africa and South Asia. The basic necessities of food, clothing, literacy, electricity, and shelter are available to over 90% of the human race.

Trade between India and the US touches $400 Billion a year, up from only $32 Billion in 2006.

2022 : Several millon people worldwide are each earning over $50,000 a year through web-based activities. These activities include blogging, barter trading, video production, web-based retail ventures, and economic activites within virtual worlds. Some of these people are under the age of 16. Headlines will be made when a child known to be perpetually glued to his video game one day surprises his parents by disclosing that he has accumulated a legitimate fortune of more than $1 million.

2024 : The typical US household is now spending over $5000 a year on products and services that are affected by the Impact of Computing, where value received per dollar spent rises dramatically each year. These include electronic, biotechnology, software, and nanotechnology products. Even cars are sometimes 'upgraded' in a PC-like manner in order to receive better technology, long before they experience mechanical failure. Of course, the products and services purchased for this $5000 in 2024 can be obtained for $3200 in 2025, $2000 in 2026, $1300 in 2027, etc.

2025 : The printing of solid objects through 3-D printers is inexpensive enough for such printers to be common in upper-middle-class homes. This disrupts the economics of manufacturing, and revamps most manufacturing business models.

2027 : 90% of humans are now living in nations with a UN Human Development Index greater than 0.800 (the 2008 definition of a 'developed country', approximately that of the US in 1960). Many Asian nations have achieved per capita income parity with Europe. Only Africa contains a major concentration of poverty.

2030 : The United States still has the largest nominal GDP among the world's nations, in excess of $50 Trillion in 2030 dollars. China's economy is a close second to the US in size. No other country surpasses even half the size of either of the two twin giants.

The world GDP growth rate trendline has now surpassed 5% a year. As the per capita gap has reduced from what it was in 2000, the US now grows at 4% a year, while China grows at 6% a year.

10,000 billionaires now exist worldwide, causing the term to lose some exclusivity.

2032 : At least 2 TeraWatts of photovoltaic capacity is in operation worldwide, generating 8% of all energy consumed by society. Vast solar farms covering several square miles are in operation in North Africa, the Middle East, India, and Australia. These farms are visible from space.

2034 : The typical US household is now spending over $10,000 a year on products and services that are affected by the Impact of Computing. These include electronic, biotech, software, and nanotechnology products. Of course, the products and services purchased for this $10,000 in 2034 can be obtained for $6400 in 2035, $4000 in 2036, $2500 in 2037, etc.

2040 : Rapidly accelerating GDP growth is creating astonishing abundance that was unimaginable at the start of the 21st century. Inequality continues to be high, but this is balanced by the fact that many individual fortunes are created in extremely short times. The basic tools to produce wealth are available to at least 80% of all humans.

Tourism into space is affordable for upper middle class people, and is widely undertaken.

________________________________________________________

I believe that this timeline represents a median forecast for economic growth from many major sources, and will be perceived as too optimistic or too pessimistic by an equal number of readers. Let's see how closely reality tracks this timeline.

For 2009, the portfolio is quite simple. I believe that small-cap value and financial stocks are at historically compelling valuations, and have no choice but to rise. A few major technology stocks are also at attractive valuations.

So the portfolio will be :

This captures the following trends from previous articles on The Futurist :

Despite my general optimism, this particular machine does not pass my 'too good to be true' test, at least before 2020. A machine that could construct homes and commercial buildings at such a speed and cost would cause an unprecedented economic disruption across the world. There would be a steep but brief depression, as existing real estate loses 90% or more of its value, followed by a huge boom as home ownership becomes affordable to several times as many people as today. I don't think that we are on the brink of such a revolution.

For me to be convinced, I would have to see :

1) Articles on this device in mainstream publications like The Economist, BusinessWeek, MIT Technology Review, or Popular Mechanics.

2) The ability to at least print simple constructs like concrete perimeter walls or sidewalks at a rate and cost several times superior to current methods. Only then can more complex structures be on the horizon.

I will revisit this technology if either of these two conditions is solidly met.

We feel compelled to dispel ten myths that we see as pervasively present in American society. These are beliefs that are repeated so often, and with so little opposition, that they are taken as fact. However, they fail to stand up to mathematical analysis, logical reasoning, or both. These combined myths have cost the US economy trillions of dollars in direct and indirect losses. In no particular order, let us evoke John Stossel and proceed to puncture these oft-unchallenged myths.

1) School Teachers are Underpaid in America : In any free-market setting, no major profession will be perpetually underpaid, relative to output produced, or the profession simply will not attract any new entrants. Another clue is that private school teachers actually earn less than public school teachers. As a private school is a business that has to pay market wages to teachers, something is seriously amiss with public school teacher salaries.

An average public school teacher earns about $54,000 a year, but this is for 9 months of work. Thus, they earn about $6000 per month. Most teachers have a BA degree in education, and some have an MA degree. A wage of $6000/month compares favorably to what people with similar education will earn in a corporate job. Furthermore, a public school teacher is shielded from economic conditions, and thus has higher job security than, say, engineers have during recessions.

So no, teachers are not underpaid, on a monthly or hourly basis, relative to professions that require a similar level of education. To compare teacher salaries to the wages of doctors and lawyers is false, as the educational qualifications, hours worked, and stress levels are entirely different.

2)Women Earn Less than Men in America : It is true that women, on average, earn less per year than men do. It is also true that 22-year-olds earn less, on average, than 40-year-olds. Why is the latter not an example of age discrimination, while the former is seized upon as an example of gender discrimination? Because men are too afraid to challenge the false statement.

If women truly did earn 20% less for doing exactly the same job as a man, any non-sexist CEO could thrash his competition by hiring only women, thus saving 20% on employee salaries relative to his competitors. Are we to believe that every major CEO and Board of Directors is so sexist as to forego billions of dollars of profit? Women entrepreneurs could hire other women and out-compete any male-dominated business, but we don't see this happening. Individual cases of discrimination may exist, but it cannot possibly be a universal norm in a profit-driven economy. Market forces would correct such mispricings, if they actually existed.

This myth is closely tied to Myth #1, with the same people propagating both. It is sad that the feminists reciting this myth are devaluing one of the most important roles in any society, that of a mother with the responsibility of cultivating the next generation of citizens, who chooses to work part-time. The backlash of this will punish feminists greatly, as immigrants from countries quite unsympathetic to feminist notions move to the US and reproduce prolifically.

3)Whites Prevent 'Minorities' from Achieving Economic Parity : Many of the points from Myth # 2 also can apply here. But let me also add that the leftists who spread this myth go to great lengths to avoid revealing that Asians actually earn more than Whites in America today. This inconvenient reality will become harder to conceal as Asians grow in number and visibility.

Furthermore, if Whites are the reason that Blacks still earn less than Whites in 2008, is it not fair to point out that Whites created a system where immigrants from poor countries like India, China, and VietNam can come to America and do so well that they surpass their White hosts, economically? Fair is fair. If Black poverty is due to Whites, then Asian success is also due to Whites. If this is not acceptable, then the only other explanation is that each group's outcome is primarily due to their own actions, rather than the invisible hand of the white majority.

Lastly, people have always migrated away from places where they are discriminated against, and into places that are relatively better for them. We see Mexicans coming to the US by the millions, even at great personal risk. Blacks from the West Indies, Africa, etc. also immigrate into the US in large numbers. At the same time, we never see African Americans voting with their feet by going to some country where they might be able to earn more. Where is the evidence of an African American exodus to Canada, Sweden, Britain, Jamaica, South Africa, etc.? In fact, Liberia was a country created specifically for this purpose, but Liberia clearly is not able to entice any African Americans to relocate or even vacation there.

4) Healthy Foods are Expensive, and Unhealthy Foods are Cheap : While I think America is the best country in the world in most ways, in dietary terms, America is sadly one of the worst. What North Korea and Zimbabwe are to economics, America is to dietary health. Most Americans are so alien to the concept of regularly consuming fresh fruits and vegetables, that I wonder if they even know what people ate before the 20th century. That the 'poor' people in America have much greater rates of obesity than higher-income people is shocking to most of the world, and also leads Americans to assume that fast food is the cheapest available choice.

On the contrary, if one goes to any no-frills grocery store, several bags of fruits and vegetables can be purchased for under $20. Tomatoes, potatoes, bananas, carrots, cauliflower, onions, cabbage, green beans, apples, broccoli, zucchini, garlic, celery, beets, kidney beans, lentils, and dozens of other plant foods all cost less than $2/pound, and sometimes under $1/pound. If all one eats are fruits, vegetables, and whole grains (which in fact is normal in many cultures), one can easily eat their fill for under $4/person/day. Compare that to $15/day for someone who eats all three meals at McDonald's. The tens of thousands of dollars of lifetime healthcare costs that a person can save with a fruit/vegetable diet are additional.

The best kept secret in America is that the cheapest food is actually the healthiest food. The barrier to eating healthy meals is not cost, but rather knowledge, habit, and culinary skills. Do you dispute the $4/person/day figure? Then you haven't actually seen how many pounds of tomatoes, bananas, carrots, apples, cabbage, etc. can be bought with $4 from a modest store. Try this for 30 days, and the rate at which you fatten your bank account will be surpassed only by the rate at which you shed bodily tonnage.

5) America's Foreign Policy is the Reason for the 9/11 Attacks : This clearly does not explain why the same group conducted attacks in Bali (twice), London, Madrid, Bombay, Jordan, Turkey, Morocco, and dozens of attacks in Iraq and Israel. They also have massacred schoolchildren in Russia, Indonesia, and Thailand. How are each of these attacks against unrelated victims due to America, rather than the logical conclusion that this group seems to have a problem with anyone who does not subscribe to their ideology? Whatever America's flaws, America does not make a terrorist behead his hostages. It is odd when an anti-American worldview itself is tainted by the US-Centric thought that anti-Americans love to condemn.

6) Leftists are 'Liberal' and 'Progressive' : You will notice that on The Futurist, we never refer to leftists as 'liberals'. Those who were truly liberal at one time became the 'neoconservatives' of today, while the fascists of yesteryear became the leftists of today. They are illiberal, intolerant, opposed to free speech, and incapable of defending their claimed beliefs in the face of incisive questions. In the modern era, the Left can best be described as a vehicle through which people can fancy themselves as intelligent without having to put in the effort previously required to become intelligent, simply by believing a set of agreed-upon dogma. The cost-benefit analysis of this approach is attractive, but this strategy falls apart spectacularly when a leftist is confronted by an informed non-leftist in a debate, hence the efforts to silence informed non-leftists through extremely illiberal means. Ace of Spades has a superb article about what attracts people to Leftism.

Income certainly does not corelate exactly to intelligence, work ethic, and determination, as someone in college may have all of these things but still not yet be earning a high income. But to believe the 'leftist' view that Bush supporters are stupid is to believe that intelligence is inversely corelated to an ability to earn a high income. This is vastly more difficult to logically accept.

This, more than anything else, explains why the Democrats have failed to get 50% of the vote in the last seven Presidential elections since 1976, while the GOP has achieved this feat 4 times (1980, 84, 88, 2004). The median-income voter does not like being told that he/she is stupid.

8) Democrats Have a Better Record on Racism than Republicans : It is an utter failure of the GOP's branding efforts that this myth has gained traction, despite :

Robert Byrd, a former leader in the KKK, still acting as the seniormost Democrat in the Senate, even to this day.

Strom Thurmond running for President on a segregationist platform as a Democrat, becoming a Republican only 16 years later.

The first two black Secretaries of State being appointed by George W. Bush

Clearly, a foreign visitor with no prior exposure would not possibly conclude that the Republican Party is somehow more racist than the Democrats. That the GOP has gotten stuck with this label despite the facts above, is remarkable. The GOP also has some unfortunate racial incidents in the recent past, but they certainly have not done more than Democrats have. I guess that Democrats say this partly because the GOP lets them.

9) Houses Always Rise in Value :Here on The Futurist, we identified the Real Estate bubble back in April of 2006, when it was heresy to suggest that home prices could not detach from incomes. Real estate is an investment class, just like stocks, bonds, art, wine, gold, and Internet domains are. Yet, you never see people nagging you about how you 'must own stocks', or 'must invest in art'. Residential real estate is the only investment category where emotion dominates quantitative analysis. Remarkably, such a belief does not exist for commercial property, but somehow the existence of a kitchen and shower bestows a structure with magical immunity to price declines. Emotions about residential real estate reveal the following two major errors that many proponents consistently make :

a) The failure to distinguish between high prices and rising prices : A good school district or California weather can certainly justify high prices, but as these factors are the same from one year to the next, there is no reason for them to result in home prices rising faster than the salaries of workers in that area. Is the school getting dramatically better each year? Is California weather improving each year?

b) The failure to account for cost of capital when calculating a home price gain : Otherwise intelligent people who fully grasp the concept of inflation still manage to think that if their home price is flat for 5 years, that they 'at least didn't lose money'. If one's cost of capital (a mortgage rate can suffice) is 6%, then 5 years of flat prices are effectively (1.06)^5, or a 34% real loss. On a $1 million home, 5 years of flat valuation is a $340,000 effective loss to one's net worth.

It will take a decade for home owners to fully accept that homes are not guaranteed to rise in price any more than stocks, art, wine, or antiques are.

10) High Oil Prices Will Create Permanent Long-Term Poverty :This belief is thoroughly debunked here. One must have very little faith in market-driven technological change or human adaptability to believe that the world of 2020, 2030, or 2040 will be so poor that car ownership will be rare.

Notice a common theme in these 10 myths. Myths 1, 2, 3, 9, and 10 betray an ignorance of free-market economics or even an active attempt to suppress evidence of it. Myths 1, 2, 3, 4, 5, 6, 7, 8 are propagated by the same ideology, indicating a total inability of that ideology to actually generate compelling ideas. Myths 1, 2, 3, and 9 are derived from a sense of entitlement and unwillingness to accept personal responsibility. Believing myths 2, 3, 4, and 5 require having never ventured outside of the hotel in any non-Western country.

Clearly, a couple of unsavory philosophies have managed to disguise themselves and dupe a majority of mainstream Americans (and the foreigners who watch our television news) into believing things that are simply illogical. As citizens, we must fight to overturn these myths, lest they give rise to even more absurdities that cost trillions of additional dollars.

"Jagdish Bhagwati, an economist at Columbia University, thinks that the offshoring of, for instance, customer service and claims-processing could save America alone $70 billion-75 billion a year."

"By Deloitte’s reckoning, medical travel will represent $162 billion in lost spending on health care in America by 2012. "

"A bit of rivalry from top foreign facilities may introduce transparency and price competition into an inefficient system riddled with oligopolies and perverse incentives. "

If some people thought the outsourcing of technical support and software development was significant, then medical tourism promises to be several times larger by the middle of the next decade. The Economist article provides a chart projecting the number of US patients expected to partake in medical tourism. The number is expected to grow from under 1 million today to over 15 million by 2017. By then, this could carve $250 Billion/year out of US healthcare spending, and pump $50 Billion/year into the destination countries, introducing $200 Billion/year of net deflationary benefit into the US economy. Everyone will know someone who went abroad for a medical procedure, with many customers comparing their experiences in India vs. Thailand vs. Jamaica.

1) Americans with no insurance are forced to make a life or death decision to get their surgeries abroad, where the service meets or exceeds their expections.

2) More insurance companies offer medical tourism with liability guarantees and cash/vacation incentives to American patients. Only a small fraction of patients are adventurous enough to do this, but all insurance companies are compelled to offer these options.

3) Major centers for medical tourism, after a track record of about a decade, develop solid brands that can attract American patients.

4) When we finally get to the point that 10% of Americans are traveling abroad for a wide array of procedures, the US will be forced to begin to take measures to reduce costs throughout the healthcare system. Losing 10% of the market is all that it will take to force some positive changes. This could begin to happen by 2020.

This confluence of market forces, globalization, and biotechnology is about to bring overdue reform to one of the biggest and worst sectors of the US and global economies. There are tremendous investment opportunities here, which I will write about in the near future.

One of the most popular dinner party conversation topics is the possibility that the United States will be joined or even surpassed as a superpower by another nation, such as China. Let us assess the what makes a superpower, and what it would take for China to match the US on each pillar of superpowerdom. Two years ago, in May 2006, I wrote the first version of this article, and it became the most heavily viewed article ever written on The Futurist. The comments section brought a wide spectrum of critiques of various points in the article, which led me to do further research, which in turn strengthened the case in some areas while weakening it others. Thus, it is time for a tune-up on the article.

A genuine superpower does not merely have military and political influence, but also must be at the top of the economic, scientific, and cultural pyramids. Thus, the Soviet Union was only a partial superpower, and the most recent genuine superpower before the United States was the British Empire. Many Europeans like to point out that the EU has a larger economy than the US, but the EU is a collection of 27 countries that does not share a common leader, a common military, a uniform foreign policy, or even a common currency. The EU simply is not a country, any more than the US + Canada comprise a single country.

The only realistic candidate for joining the US in superpower status by 2030 is China. China has a population over 4 times the size of the US, has the fastest growing economy of any large country, and is mastering sophisticated technologies. But to match the US by 2030, China would have to :

1) Have an economy that matches the US economy in size. If the US grows by 3% a year for the next 22 years, it will be $30 trillion in 2008 dollars by then. Note that this is a modest assumption for the US, given the accelerating nature of economic growth, but also note that world GDP presently grows at a trend of 4.5% a year, and this might at most be 6% a year by 2030. China, with an economy of $3.2 trillion in nominal (not PPP) terms, would have to grow at 11% a year for the next 22 years straight to achieve the same size, which is already faster than its current 9-10% rate, if even that can be sustained for so long (no country, let alone a large one, has grown at more than 8% over such a long period). In other words, the progress that the US economy would make from 1945 to 2030 (85 years) would have to be achieved by China in just the 22 years from 2008 to 2030. Even then, this is just the total GDP, not per capita GDP, which would still be merely a fourth of America's.

The weak dollar leads some who suddenly fancy themselves as currency experts to believe/hope that the US will lose economic dominance. However, we see from this chart that the US dollar comprises a dominant 65% of global currency reserves (an even greater share than it commanded in 1995), while the second highest share is that of the Euro (itself the combined currency of 21 separate countries) at just 25%. Furthermore, the Euro is not rising as a percentage of total reserves, despite the EU and Eurozone adding many new member nations after 2001. Which currency has any chance of overtaking the US, particularly a currency that is associated with a single sovereign nation? The Chinese Yuan represents under 2% of world reserves, and China itself stockpiles US dollars. Clearly, US dominance in this metric is enormous, and is not dwindling in the forseeable future.

2) Have a military capable of waging wars anywhere in the globe (even if it does not actually wage any). Part of the opposition that anti-Americans have to the US wars in Afghanistan and Iraq is the envy arising from the US being the only country with the means to invade multiple medium-sized countries in other continents and still sustain very few casualties. No other country currently is even near having the ability to project military power with such force and range, despite military spending being only 3% of US GDP - a lower proportion than many other countries. Mere nuclear weapons are no substitute for this. The inability of the rest of the world to do anything to halt genocide in Darfur or other atrocities in Burma or Zimbabwe is evidence of how such problems can only get addressed if and when America addresses them.

3) Create original consumer brands that are household names everywhere in the world (including in America), such as Coca-Cola, Nike, McDonalds, Citigroup, Xerox, Microsoft, or Google. Europe and Japan have created a few brands in a few select industries, but China currently has almost none. Observing how many American brand logos have populated billboards and sporting events in developing nations over just the last 15 years, one might argue that US cultural and economic dominance has even increased by this measure.

4) Have major universities that are household names, that many of the worlds top students aspire to attend. 17 of the world's top 20 universities are in the US. Until top students in Europe, India, and even the US are filling out an application for a Chinese university alongside those of Harvard, Stanford, MIT, or Cambridge, China is not going to match the US in the knowledge economy. This also represents the obstacles China has to overcome to successfully conduct impactful scientific research.

5) Become the center of gravity for all types of scientific research. The US conducted 32% of all research expenditures in 2007, which was twice as much as China, and more than the 27 combined countries of the EU. But it is not just in the laboratory where the US is dominant, but in the process to deliver innovations from the laboratory to the global marketplace. To displace the US, China would have to become the nation that produces the new inventions and corporations that are adopted by the mass market into their daily lives. From the telephone and airplane over a century ago, America has been the engine of almost all technological progress. Despite the fears of innovation going overseas, the big new technologies and influential applications continue to emerge from companies headquartered in the United States. Just in the last four years, Google emerged as the next super-lucrative company (before eBay and Yahoo slightly earlier), and the American-dominated 'blogosphere' emerged as a powerful force of information and media. Even after Google, a new batch of technology companies, this time in alternative energy, have rapidly accumulated tens of billions of dollars in market value. It is this dominance across the whole process of university excellence to scientific research to creating new companies to bring technologies to market that makes the US innovation engine virtually impossible for any country to surpass.

6) Attract the best and brightest to immigrate into China, where they can expect to live a good life in Chinese society. The US effectively receives a 'education import' estimated to be above $200 billion a year, as people educated at the expense of another nation immigrate here and promptly participate in the workforce. As smart as people within China are, unless they can attract non-Chinese talent that is otherwise migrating to the US, and even talented Americans, they will not have the same intellectual and psychological cross-pollination, and hence miss out on those economic benefits. The small matter of people not wanting to move into a country that is not a democracy also has to be resolved. The true measure of a country is the net difference between how many people seek to enter, and how many people seek to leave. The US has a net inflow of immigrants (constrained by quotas and thus a small fraction of the unconstrained number of people who would like to enter), while China has a net outflow of native-born Chinese. Click on the map to enlarge it, and see the immigration rate to America from the world (which itself is constrained by quotas in the US and forcible restrictions on fleeing the country in places like Cuba and North Korea).

7) Be the leader in entertainment and culture, which is the true driver of societal psychology. China's film industry greatly lags India's, let alone America's. We hear about piracy of American music and films in China, which tells us exactly what the world order is. When American teenagers are actively pirating music and movies made in China, only then will the US have been surpassed in this area. Take a moment to think how distant this scenario is from current reality. Which country can claim the title of #2 in entertainment and cultural influence? That such a question cannot easily be answered itself shows how total US dominance in this dimension really is.

8) Be the nation that engineers many of the greatest moments of human accomplishment. The USSR was ahead of the US in the space race at first, until President Kennedy decided in 1961 to put a man on the moon by 1969. While this mission initially seemed to be unnecessary and expensive, the optimism and pride brought to anti-Communist people worldwide was so inspirational that it accelerated many other forms of technological progress and brought economic growth to free-market countries. This eventually led to a global exodus from socialism altogether, as the pessimism necessary for socialism to exist became harder to enforce. People from many nations still feel pride from humanity having set foot on the Moon, something which America made possible.

China currently has plans to put a man on the moon by 2024. While being only the second country to achieve this would certainly be prestigious, it would still be 55 years after the United States achieved the same thing. That is not quite the trajectory it would take to approach the superpowerdom of the US by 2030. If China puts a man on Mars or has permanent Moon bases before the US, I may change my opinion on this point, but the odds of that happening are not high.

9) Be the nation expected to thanklessly use its own resources to solve many of the world's problems. It is certainly not a requirement for a superpower to be benevolent, but it does make the path to superpower ascension easier, as a malevolent superpower will receive even more opposition from the world than a benevolent one, which itself is already substantial. If the US donates $15 billion in aid to Africa, the first reaction from critics is that the US did not donate enough. On the other hand, few even consider asking China to donate aid to Africa. After the 2004 Indian Ocean tsunami and the 2008 cyclone in Burma, the fashionable question was why the US did not donate even more and sooner, rather than why China did not donate more, despite being geographically much closer. Ask yourself this - if an asteroid were on a collision course with the Earth, which country's technology and money would the world depend on to detect it, and then destroy or divert it? Until China is relied upon to an equal degree in such situations, China is not in the same league.

10) Adapt to the underappreciated burden of superpowerdom - the huge double standards that a benign superpower must withstand in that role. America is still condemned for slavery that ended 140 years ago, even by nations that have done far worse things more recently than that. America's success in bringing democracy to Afghanistan and Iraq, and defending local populations from terrorists, is condemned more than the UN's inaction in preventing genocide and slavery. Is China prepared to apologize for Tianenmen Square, the genocide in Tibet, the 30 million who perished during the Great Leap Forward, and the suppression of news about SARS, every day for the next century? Is China remotely prepared for being blamed for inaction towards genocide in Darfur while simultaneously being condemned for non-deadly prison abuse in a time of war against opponents who follow no rules of engagement? The upcoming 2008 Olympics will be an event where political demonstrations are going to grab headlines perhaps to a greater degree than the sports themselves, and the Chinese leadership will be tested on how they deal with simmering domestic discontent under the scrutiny of the world media. The amount of unfairness China would have to withstand to truly achieve political parity with America might be prohibitive given China's history over the last 60 years.

Economically, is China prepared to withstand the pressures that the US presently bears? How long before the environmental movement (at least the fraction of it that is actually concerned about the environment) recognizes that China is a bigger polluter of the atmosphere than the US is, and that the road to pollution reduction leads straight to China? How long before China is pressured to donate aid to Africa in the manner that the US does? What happens when poorer nations benefit from Chinese R&D expenditures, particularly if those are neighboring countries that China is not friendly with?

Of the ten points above, Britain, France, Germany, and Japan have tried for decades, and have only achieved parity with the US on maybe two of these dimensions at most. China will surpass European countries and Japan by 2030 by achieving perhaps two or possibly even three out of these ten points, but attaining all ten is something I am willing to confidently bet against. The dream of anti-Americans who relish the prospect of any nation, even a non-democratic one, surpassing the US is still a very distant one.

A point that many bring up is that empires have always risen and fallen throughout history. This is partly true, but note that the Roman Empire lasted for over 1000 years after its peak. Also note that the British Empire never actually collapsed since Britain is still one of the most successful countries in the world today, and the English language is the most widely spoken in the world. Britain was merely surpassed by its descendant, with whom it shares a symbiotic relationship. The US can expect the same sort of very long tail if it is finally surpassed, at some point much later than 2030 and probably not before the Technological Singularity, estimated for around 2050, which would make the debate moot.

That writing this article is even worthwhile is a tribute to how far China has come and how much it might achieve. I would not bother to write such an article about, say, India or Germany (the largest of the 27 EU countries). Nonetheless, there is no other country that will be a superpower on par with the US by 2030. This is one of the safest predictions The Futurist can make.

Energy and Financials are both large sectoral components of the S&P500. Yet the two have diverged immensely over the last 2 years. Not since the technology bust at the start of the decade have any two sectors diverged so much from each other, and from the composite S&P500 index.

XLE is an exchanged-traded fund for the Energy sector, while XLF is the equivalent for the Financial sector. First, let us view a two-year chart :

Energy has outperformed the S&P500 by an equal margin that Financials have lagged the S&P500 by. Next, we can view a five-year chart :

While Financials only began to fall away in 2007, Energy has gone so high above the composite market that it reminds one of the technology bubble of the late 1990s.

It seems quite obvious here that while it is impossible to identify the exact top of the Energy run, or the exact bottom of the Financials correction, it would be very prudent to sell any existing holdings in Energy (or even short Energy if you have the appetite) and rotate the proceeds into Financials. The gap could widen in the short term, but rarely do two sectors reach such extreme disparities that make a profitable trade so obvious.

I would normally not bother to rebut something like this, except that this particular essay is so stunningly wrong and annoyingly pessimistic, despite the seemingly meticulous research the author has conducted, that I am compelled to disect how insulated groupthink can spiral into a zone where even the most extreme conclusions are accepted.

1) That rising oil prices do not cause a long-term downward adjustment in demand. Oil demand may be inelastic in the short-term, but in the long term, people will buy more efficient cars, carpool, ride bicycles, reduce discretionary trips, conduct more commerce online, etc. To assume otherwise is to ignore the most basic law of economics. This is before even accounting for the indirect benefits of declining oil demand such as a drop in traffic fatalities (which cost $2 million apiece to the economy), less wear and tear on roads and tires, less pollution, less real estate consumed by gas stations, less competition for parking spaces, etc.

2) That rising grain prices will not move consumption away from increasingly expensive meat towards affordable grains, fruits, and vegetables, thereby reducing grain and water demand. This, too, is economic illiteracy. If the price of beef triples while the price of rice and potatoes does not, consumption patterns shift.

3) That there will be very little technological innovation in alternative energy, automobile efficiency, batteries, or information technology from this point on. In fact, there is innovation in all of those areas, so we have multiple layers of protection against the doomsday scenario, as detailed by these articles :

4) That most economic growth is not in knowledge-based industries, which consume far less energy per dollar of output. The US economy today produces twice the financial output per unit of oil consumption as it did in 1975, with information technology rising as a portion of total economic output.

5) That a major economic downturn, featuring skyrocketing food prices for people in poorer countries, will somehow not translate to a lower birth rate that inhibits population growth and hence curbs demand, and that population projections will somehow not change.

6) That there will be no humans living beyond the Earth (whether in orbit or on the Moon) by 2040. The reason this point is relevant is because a society cannot advance in space travel without simultaneous advances in energy technology. I say that advances in photovoltaic efficiency make Lunar colonies closer to viability by that time.

Two of the leading thinkers in the field of life extension, Ray Kurzweil and Aubrey de Grey, believe that by the 2020s, human life expectancy will increase by more than one year every year (in 2002 Kurzweil predicted that this would happen as soon as 2013, but this is just another example of him consistently overestimating the rate of change). This means that death will approach the average person at a slower rate than the rate of technology-driven lifespan increases. It does not mean all death suddenly stops, but it does mean than those who are not close to death do have a possibility of indefinite lifespan after AEV is reached. David Gobel, founder of the Methuselah Foundation, has termed this as Actuarial Escape Velocity (AEV), essentially comparing the rate of lifespan extension to the speed at which a spacecraft can surpass the gravitiational pull of the planet it launches from, breaking free of the gravitational force. Thus, life expectancy is currently, as of 2007 data, rising at 20% of Actuarial Escape Velocity.

I remain unconvinced that such improvements will be reached as soon as Ray Kurzeil and Aubrey de Grey predict. I will be convinced after we clearly achieve 50% of AEV in developed countries, where six months are added to life expectancy every year. It is possible that the interval between 50% and 100% of AEV comprises less than a decade, but I'll re-evaluate my assumptions when 50% is achieved.

Serious research efforts are underway. The Methuselah Mouse Prize will award a large grant to researchers that can demonstrate substantial increases in the lifespan of a mouse (more from The Economist). Once credible gains can be demonstrated, funding for the research will increase by orders of magnitude.

The enormous market demand for lifespan extension technologies is not in dispute. There are currently 95,000 individuals in the world with a net worth greater than $30 million, including 1125 billionaires. Accelerating Economic Growth is already growing the ranks of the ultrawealthy at a scorching pace. If only some percentage of these individuals are willing to pay a large portion of their wealth in order to receive a decade or two more of healthy life, particularly since money can be earned back in the new lease on life, then such treatment already has a market opportunity in the hundreds of billions of dollars. The reduction in the economic costs of disease, funerals, etc. are an added bonus. Market demand, however, cannot always supercede the will of nature.

This is only the second article on life extension that I have written on The Futurist, out of 154 total articles written to date. While I certainly think aging will be slowed down to the extent that many of us will surpass the century mark, it will take much more for me to join the ranks of those who believe aging can be truly reversed. To track progress in this field, keep one eye on the rate of decline in cancer and heart disease deaths, and another eye on the Methuselah Mouse Prize. That such metrics are even advancing on a yearly basis is already remarkable, but monitoring anything more than these two measures, at this time, would be premature.

So let's find out what the group prediction is, with a poll. Keep in mind that most people are biased towards believing this date will fall within their own lifetimes (poll closed 7/1/2012) :

Many procedures that cost $100,000 or more in the US can be done with equal competence for $10,000 in Thailand or India. Normally, if something of comparable quality is available for just a tenth of the cost, demand migrates to the cheaper alternative in a huge torrent. Even after accounting for travel costs, the gulf is immense. Yet it appears that only a small percentage of US patients for cardiovascular surgery, joint replacements, etc. are going overseas for their operations. Medical tourism will still only earn a miniscule $4 Billion in 2008 for India, Thailand, and Singapore combined, of which only one-third is from American patients. Thus, only a fraction of a percent of the US, European, and Japanese healthcare sectors have been dented.

This, of course, can be due to two reasons :

a) Fears about quality/safety, either real or perceived.

b) Net out-of-pocket cost to the patient still being lower in the US, due to insurance.

Regarding quality, many of these surgeons are certified by US boards or even educated in US colleges, and accidents do not appear to happen at any greater rate than in the US. At the same time, it is not possible to pursue malpractice suits against facilities in India or Thailand, which, while certainly an element of risk, itself is part of the reason for their lower price relative to the US. It is inevitable that some mishap befalls an American patient in Asia, and the media latches onto the story for a week or more, reversing the market demand for medical tourism for years, even if the incidence of such tragedies may be no more than in US hospitals. In fact, I am surprised it has not happened already.

In terms of cost, that brings us to the elephant in the room, which is the revelation that it is not India or Thailand that are too cheap, but rather that US healthcare is too expensive to begin with. I am no expert in this field, but it seems obvious that a lack of market forces in the value chain, a lack of regulation of lawsuits, the horrendous dietary habits of most Americans, and the tendency of consumers to not care about how much the insurance company pays are all contributory factors to what is arguably the greatest tragedy in US economic history. Socializing the healthcare system will worsen it, for reasons too vast to delve into here. It is true that many Canadians come to the US for urgent procedures that would require a 3-month wait in Canada.

However, millions of Americans don't have health insurance at all, and while for some this is by choice, for some it is not. For them, traveling abroad for a $10,000 heart procedure may be the only affordable option. Even if the most experienced and well-frequented facilities are in India and Thailand, nearby options also exist in Jamaica and Costa Rica. Over 20 other countries across Eastern Europe, Asia, and Latin America are also vying for a slice of the pie.

As unintended consequences ripple through, herein lies the path to forcing some degree of reform of the US healthcare system. As more Americans either choose or are forced to seek low-cost procedures abroad, even if it is only a small percentage American patients, this will compel insurance companies to include medical tourism options to patients. The insurance company can offer their own version of malpractice insurance to the patient, cover all travel expenses for the patient and spouse, and even throw in a vacation package and cash incentive. Even after all this, if the cost of the $10,000 procedure in India or Thailand has now risen to $30,000, it still outcompetes the $100,000 US alternative handily. Some insurance companies are already starting this with enthusiasm, and before long, all insurance companies will effectively have to compete on this level.

As the number of Americans combining surgeries with a tropical vacation becomes a small but significant percentage of the total patient pool, the US healthcare system will have no choice but to undertake the difficult reforms to bring costs down at a systemic level, thus benefiting even those Americans who refuse to go overseas, and even procedures that are not candidates for offshoring. If software development can be outsourced to India where it is one fourth the cost, surgeries cannot expect to be perpetually immune to competition that is a tenth or twentieth of the cost. Through some combination of tort reform, free-market principles, and preventative focus, US costs will gradually be brought down closer to a market rate. Perhaps the US can comfortably sustain prices that are 3 times that of Thailand, but not 10 times. This will be the next industry in the US that is forced to adapt.

To review, the expected sequence of events is :

1) Americans with no insurance are forced to make a life or death decision to get their surguries abroad, where the service meets or exceeds their expectations.

2) More insurance companies offer medical tourism with liability guarantees and cash/vacation incentives to American patients. Only a small fraction of patients are adventurous enough to do this, but all insurance companies are compelled to offer these options.

3) Major centers for medical tourism, after a track record of about a decade, develop solid brands that can attract American patients.

4) When we finally get to the point that 10% of Americans are traveling abroad for a wide array of procedures, the US will be forced to begin to take measures to reduce costs throughout the healthcare system. Losing 10% of the market is all that it will take to force some positive changes. This could begin to happen by 2020.

Such a sequence of events, of course, will boost the US economy greatly. Of the $2 Trillion mentioned above, as much as half of that, a whopping $1 Trillion or 7% of the US economy, is estimated to be wastage incurred due to a shortage of market forces in healthcare. Imagine if that $1 Trillion could be redeployed elsewhere. A person who saves $90,000 on a heart procedure can choose to use that money on emerging innovations in biotechnology that may be available in the 2020s, such as treatments to slow down or halt some aspects of aging.

This is not going to be a trend that moves as quickly as some of the others discussed here on The Futurist. But the economics involved are massive enough that it has certainly caught my eye. Let's see what happens, both before and after the predicted media frenzy over a foreign medical mishap.

The article also mentions how hospitals are opposed to these technological advancements, as they reduce the number of days of revenue a hospital can collect while a patient recovers after surgury. This anti-productive, entitlement mentality will hasten the downfall of the US healthcare cartel, as shorter recovery times due to smaller incisions will make a trip to a tech-friendly facility in Thailand or India even more compelling. When the cost is a tenth and the recovery time is a fifth of what it would be in the US, how long before market forces dominate?

I wrote version 1.0 of this article on November 26, 2006. 16 months later, it is time for version 2.0 to provide more historical context on how misplaced the hype over some fashionable issues eventually turns out to be, and why what once appeared to be a harbinger of doom is now all but forgotten.

In the 2001-03 economic downturn, the aftermath of the technology bust resulted in hundreds of thousands of software engineers and assorted high-tech workers losing their jobs. A jittery public was vulnerable to influence from isolationist politicians, with the likes of Lou Dobbs and Pat Buchanan fanning the flames in the media. As a result, the simple business practice of moving certain components of daily operations to a lower-cost location, if only to keep up with competitors already doing the same, became a dirty word - 'outsourcing'.

The cover story of Wired Magazine's February 2004 issue was on the outsourcing of software jobs to India. Within the article, a core theme was the supposedly tremendous hardships that white-collar Americans were about to experience due to a 'giant sucking sound' of jobs going to India. In the same month, then Presidential candidate John Kerry screamed about the practicies of "Benedict Arnold CEOs" who outsource American jobs to India, hoping to gain the support of isolationists and the economically ignorant. Elsewhere, very uncharitable things were said by leftists about brown-skinned Indians, due to their rapid adoption of capitalism and globalization at the expense of the leftist plantation where Indians were required to symbolize Gandhian non-violence, zen spirituality, yoga, curries, and the glorification of poverty.

Let's call February 2004 as time when the bubble of 'outsourcing' fears reached a fevered peak. Now, what happens whenever a bubble of psychology reaches a peak?

So 7.5 million jobs were created in this short time, the unemployment rate is lower than it has been for 33 of the last 37 years, and wages have risen while real GDP has grown at a 3.2% clip. There is thus no evidence of job losses, wage erosion, or underemployment over this period. Take that, Lou Dobbs, Pat Buchanan, John Kerry, Dennis Kucinich, and other assorted demagogues, who have no ability whatsoever to truly grasp the trends that shape our world.

What does the future of outsourcing hold? Is there still a risk of jobs vanishing from the US at a rate faster than they can be produced, as pessimists still maintain? Unlikely, even though Internet backbone bandwidth has quintupled in the last 4 years, and many more people in India have PCs and Broadband connections today than in early 2004. This is because aggregate demand growth has saturated even India's vast labor pool. Salaries in India have been rising at over 12% a year due to labor shortages, causing their cost advantage to erode. The Wired article from 2004 stated that the average salary of an Indian programmer was $8000 a year; today, it is closer to $15,000 a year in US dollars. India itself has started outsourcing to Bangladesh and Eastern Europe, which are much smaller labor pools and will also saturate quickly. Indeed, the trends favor more job creation in America and India.

Thus, the bubble of fashionable pessimism has moved to the next topic, which happens to be the decline of the dollar. This, too, will turn out to be a passing concern that the economy adjusts to after a brief period of pain. Among other things, a competitively priced dollar has led to Europe outsourcing jobs to the US, and is also working towards reducing US dependence on oil. A debunking of the 'weak dollar' fad will be posted on another day.

In scouring the startup universe for the companies and technologies that can reshape human society and create entirely new industries, one has to play the role of a prospective Venture Capitalist, yet not be constrained by the need for a financial exit 3-6 years hence.

Therefore, I have assembled a list of nine small companies, each with technologies that have the potential to create trillion-dollar economic disruptions by 2020, disruptions that most people have scarcely begun to imagine today. Note that the emphasis is on the technologies rather than the companies themselves, as a startup requires much more than a revolutionary technology in order to prosper. Management skills, team synergy, and execution efficiency are all equally important. I predict that out of this list of nine companies, perhaps one or two will become titans, while the others will be acquired by larger companies for modest sums, enabling the technology to reach the market through the acquiring company.

1) NanoSolar : NanoSolar produces low-cost solar cells that are manufactured by a process analogous to 'printing'. The company's technology was selected by Popular Mechanics as the 'Innovation of the Year' for 2007, and Nanosolar's solar cells are significantly ahead of the Solar Energy Cost Curve. The flexible, thin nature of Nanosolar's cells may enable them to be quickly incorporated onto the surfaces of many types of commercial buildings. Nanosolar's first shipments have already occurred, and if we see several large deployments in the near future, this might just be the company that finally makes solar energy a mass-adopted consumer technology. Nanosolar itself calls this the 'third wave' of solar power technology.

2) Tesla Motors : I wrote about Tesla Motors in late 2006. Tesla produces fully electric cars that can consume as little as 1 cent of electricity per mile. They are about to deliver the first few hundred units of the $98,000 Tesla Roadster to customers, and while the Roadster is not a car that can be marketed to average consumers, Tesla intends to release a 4-door $50,000 sedan named 'WhiteStar' in 2010, and a $30,000 sedan by 2013. The press coverage devoted to Tesla Motors has been impressive, but until the WhiteStar sedan successfully sells at least 10,000 units, Tesla will not have silenced critics who say the technology cannot be brought down to mass-market costs.

3) Aptera Motors : When I first wrote about Tesla Motors, it was before I had heard about Aptera Motors. While Tesla is aiming to produce a $30,000 sedan for 2013, Aptera already has an all-electric car due for late 2008 that is priced at just $27,000, while delivering the equivalent of between 200 and 330 mpg. The fact that the vehicle has just three wheels may reduce mainstream appeal to some degree, but the futuristic appearance of the car will attract others. Aptera Motors is a top candidate for winning the Automotive X-Prize in 2010.

The simultaneous use of Nanosolar's solar panels with the all-electric cars from Tesla and Aptera may enable automotive driving to be powered by solar generated electricity for the average single-family household. The combination of these two technologies would be the 'killer ap' of getting off of oil and onto fully renewable energy for cars.

4) 23andMe : This company gets some press due to the fact that co-founder Anne Wojcicki is married to Sergey Brin, even as Google has poured $3.9M into 23andMe. Aside from this, what 23andMe offers is an individual's personal genome for just $1000. What a personal genome provides is a profile of which health conditions the customer is more or less susceptible to, and thus enables the customer to provide this information to his physician, and make the preventive lifestyle adjustments well in advance. Proactive consumers will be able to extend their lifespans by systematically reducing their risks of ailments they are genetically predisposed to. As the service is a function of computational power, the price of a personal genome will, of course, drop, and might become an integral part of the average person's medical records, as well as an expense that insurance covers.

5) Desktop Factory : In 2008, Desktop Factory will begin to sell a $5000 device that functions as a 3-D printer, printing solid objects one layer at a time. A user can scan almost any object (including a hand, foot, or head) and reproduce a miniature model of it (up to 5 X 5 X 5 inches). The material used by the 3-D printer costs about $1 per cubic inch.

The $5000 printer is a successor to similar $100,000 devices used in mechanical engineering and manufacturing firms. Due to the Impact of Computing, consumer-targeted devices costing under $1000 will be available no later than 2014. I envision an ecosystem where people invent their own objects (statuettes, toys, tools, etc.) and share the scanned templates of these objects on social networking sites like MySpace and Facebook. People can thus 'share' actual objects over the Internet, through printing a downloaded template. The cost of the printing material will drop over time as well. A lot of fun is to be had, and expect an impressive array of brilliant ideas to come from people below the age of 16.

6) Zazzle : Welcome to the age of the instapreneur. Zazzle enables anyone to design their own consumer commodities like T-shirts, mugs, calendars, bumper stickers, etc. on demand. If you have an idea, you can produce it on Zazzle with no start-up costs, and no inventory risks. You profit even from the very first unit you sell, with no worries about breakeven thresholds. You can produce an infinite number of products, limited only by your imagination. At this point, those of you reading this are probably in the midst of an avalanche of ideas of products you would like to produce.

While the bulk of Zazzle users today are would merely be vanity users who manage to sell under ten units of their creations, this new paradigm of low-cost customization will inevitably creep up to major industrial supply chains. Even more interesting, think about #5 on this list, Desktop Factory, combining with Zazzle's application, into an amazing transformation of the very economics of manufacturing and mass-production.

9) Ugobe : Ugobe sells a robotic dinosaur toy known as the Pleo. A mere toy, especially a $350 toy, would not normally be on a list of technologies that promise to crease the fabric of human society. However, a closer look at the Pleo reveals many impressive increments in the march to make inexpensive robots more lifelike. The skin of the Pleo covers the joints, the Pleo has more advanced 'learning' abilities than $2500 robots from a few years ago, and the Pleo even cries when tortured, to the extent that it is difficult to watch this.

The reason Ugobe is on this list is that I am curious to see what is the next product on their roadmap, so that I can gauge how quickly the technology is advancing. The next logical step would be an artificial mammal of some sort, with greater intelligence and realistic fur. The successful creation of this generation of robot would provide the datapoints to enable us to project the approximate arrival of future humanoid robots, for better or for worse. Another company may leapfrog Ugobe in the meantime, but they are currently at the forefront of the race to create low-priced robotic toys.

This concludes the list of nine companies that each could greatly alter our lives within the next several years. Of these nine, at least three, Nanosolar, Tesla Motors, and 23andMe, have Google or Google's founders as investors. The next 24 months have important milestones for each of these companies to cross (by which time I might have a new list of new companies). For those that clear their respective near-term bars, there might just be a chance of attaining the dizzy heights that Google, Microsoft, or Intel has.

The US government usually declares a recession only several months after it has begun. I find the Economic Cycle Research Institute to be a vastly more reliable source of leading indicators. While the ECRI has still not declared a recession as 'unavoidable', the economic data of the last week tells me that it is, indeed, not just unavoidable at this point, but that it actually began in December 2007. It is far too late for any 'stimulus' to prevent a recession, nor will the EU manage to avoid hardship of its own.

As the question of recession is now in the past, the next question is when a recovery may take place. The drop in economic conditions between October and January was so steep, and the Federal Reserve's reduction in rates in January, while belated, was so large in magnitude, that GDP recovery may arrive as soon as Q4. But I am not making a prediction on recovery timing yet.

On January 23, 2007, I created an investment portfolio to be frozen at that time, and evaluated on December 31, 2007 against the benchmark of the S&P500 index. The portfolio incorporated principles, economic trends, and technologies discussed in other articles here on The Futurist. Dividends were reinvested, and so the price paid reflects dividend-adjusted cost-basis. Yahoo and Google Finance do tend to miss recording some dividends, so one must go to a more reliable site like Morningstar to account for the exact dividends.

So how did the portfolio do? I achieved a return of 13.3%, vs. just 4.3% for the S&P500, from January 23 to December 31. Most fund managers are unable to beat the S&P500 index despite the advanced tools at their disposal. The fraction of those that can beat the index by a margin 9.0 percentage points is even more exclusive, putting this portfolio in the top 10% of all mutual fund results for this period.

As always, weightage matters just as much as stock-picking. The first two securities, amounting to 50% of my portfolio, were a total disaster. In fact, when I first created the portfolio, I listed FXI as a security that was strongly considered but left out. FXI returned an eye-popping 83% over the same period, so if I had included FXI instead of ICF, the portfolio's total return would have exceeded 25%. But it was not included, so 'what ifs' do not count.

The India Investment Fund (IIF) was a star, more than compensating for the failure of the first two securities. But the real home runs came from the video game stocks. Three of the four outperformed the S&P500, and two of those, Activision and GameStop, surged into the stratosphere. My selection and detailed analysis of this sector way back on April 17, 2006 yielded a spectacular payoff. As a quartet, these 4 gaming stocks returned a combined 49% over this period.

I am now going to present my 2008 portfolio, which is to be tracked over the remaining 13+ months between now and the end of 2008, again in relation to the S&P500 index. The hypothetical portfolio of $100,000 will be invested in exchange-traded securities and mutual funds that reflect what I believe to be an optimal portfolio construction for 2007. We will, at the end of the period, see how the portfolio tracks the broader market. Dividends will be re-invested.

So the portfolio is :

This is a simpler portfolio, with less emphasis on gaming, and more on fundamental value-based principles. The selections represent general principles and specific predictions outlined in the previously written articles :

Here on The Futurist, we have a long tradition of seeking permanent independence from oil-drunk dictatorships and theocracies, with the pursuit of long-term gains taking precendence over the avoidance of short-term pain. I refer you to :

When oil first hit $70/barrel nearly two years ago, there were widespread fears of the US economy tipping into recession. I pointed out that a much smaller piece of the US economy has exposure to oil than was the case in 1974 or 1981, which were the last times such high prices were seen (in inflation-adjusted terms). Google, Oracle, and VMWare are far less vulnerable to oil prices than General Motors and Federal Express. Sure enough, after 2 years of oil prices hovering around $70, the US economy has successfully adapted to it. The specter of the $70 barrier is behind us, permanently. This chart from the Bureau of Labor Statistics shows the annualized rate of oil price inflation over the last few years.

Notice how the rise from $20 to $80 led to import price inflation (the blue line) touching 10% for three years. However, that rise is now behind us, with the settled price of $70/barrel or more no longer causing further inflation in the price of imported products. Even more striking is the shrinkage in the US trade deficit. Despite oil imports being as much as one third of the US trade deficit of about $60 Billion/month, the trade deficit has actually shrunk since the peak of 2006, contributing positively to GDP growth for the first time in over a decade (chart from BusinessWeek). That the US economy can now take $70 and even $80 oil in stride is the biggest story that no one has noticed yet.

But as oil has moved to $60 to $70 a barrel, it has fostered a counterwave — a wave of authoritarian leaders who are not only able to ensconce themselves in power because of huge oil profits but also to use their oil wealth to poison the global system — to get it to look the other way at genocide, or ignore an Iranian leader who says from one side of his mouth that the Holocaust is a myth and from the other that Iran would never dream of developing nuclear weapons, or to indulge a buffoon like Chávez, who uses Venezuela’s oil riches to try to sway democratic elections in Latin America and promote an economic populism that will eventually lead his country into a ditch.

But Mr. Friedman is a bit self-contradictory on which outcome he wants, as evidenced across his New York Times columns.

So here’s my prediction: You tell me the price of oil, and I’ll tell you what kind of Russia you’ll have. If the price stays at $60 a barrel, it’s going to be more like Venezuela, because its leaders will have plenty of money to indulge their worst instincts, with too few checks and balances. If the price falls to $30, it will be more like Norway. If the price falls to $15 a barrel, it could become more like America

Either tax gasoline by another 50 cents to $1 a gallon at the pump, or set a $50 floor price per barrel of oil sold in America. Once energy entrepreneurs know they will never again be undercut by cheap oil, you’ll see an explosion of innovation in alternatives.

And by not setting a hard floor price for oil to promote alternative energy, we are only helping to subsidize bad governance by Arab leaders toward their people and bad behavior by Americans toward the climate.

All of these articles were written within a 4-month period in early 2007. Both philosophies are true by themselves, but they are mutually exclusive. Mr. Friedman, what do you want? Higher oil prices or lower oil prices?

But forget about Mr. Friedman wanting it both ways. Instead, I am going to go with the second choice, that of higher oil prices. I see this as a golden opportunity for permanent, far-reaching, multifaceted geopolitical change. The US economy has successfully adapted to a permanent $70/barrel oil price with almost no real pain, and thus it is the time to take the bull by the horns, and lure the Petrotyrants into the ultimate irreversible trap.

It is time to hope that the price of oil rises to $120/barrel by 2010, and stays above that level permanently.

Why, you may ask? Won't such a high price make Iran, Venezuela, Saudi Arabia, Russia, Nigeria, Sudan, Kazakhstan, and others even wealthier, without them having done anything to earn it? Won't it make Sudan more genocidal, and Iran more able to equip terrorists? Won't Saudi Arabia be able to fund even more Madrasas across the world?

Sure it will, for a time. But consider the perils of burning the candle at both ends.

But won't this also cause economic suffering in the US? For a time, yes. Gasoline will be at $5/gallon, and the trade deficit will temporarily widen. I claim the possible recession will be brief, if there even is one at all, as the run-up from the present price of $80/barrel up to $120/barrel is already less of a shock than the jump from $20 to $80 that we already have successfully sustained. I say all of this is worthwhile short-term pain, for when the quietly toiling engine of technological innovation emerges from its chrysalis, it will be gigantic.

The technological climate of 2007 is very different from that of 1974 or 1981. There is so much breadth and depth in energy innovation right now, even at the present $70-$80/barrel, that $120/barrel will move the technology and economics of alternative energy into fast-forward. Currently, the petroleum market is shielded from exposure to both the electricity market and the agricultural market. However, upcoming electric and plug-in hybrid automobile technologies consume electricity at an equivalent cost of just $1/gallon. Furthermore, electricity can be generated from multiple sources that exist in almost every country, eliminating the weak position that oil importers are in relative to oil exporting nations. With gasoline at $5/gallon, consumers will migrate towards hybrids, plug-in hybrids, and electric vehicles so rapidly that the auto manufacturers will start engaging in aggressive competition to lower prices and accelerate innovation. This will greatly widen the fronts at which the oil market is exposed to the far cheaper and decentralized electricity market. This spells trouble for oil producers who have to compete with electricity that is 3-5X cheaper in providing the same transportation.

Simultaneously, cellulostic and algae-derived ethanol research efforts will get supercharged, greatly increasing the probability of a breakthrough that enables the attractive math of cellulose or algae to replace the unimpressive economics of corn ethanol. If ethanol from switchgrass or algae is more compelling than oil at $120/barrel, oil has yet another enemy in addition to electricity. The combination of electric vehicle and cellulose/algae ethanol technologies will act as a 1-2 punch to slash the consumption of oil across both the US and China permanently within just a few short years.

Then, the fun begins. The terrorists and despots who got lured into profligate spending under $120 oil will eventually find that the demand for their exports is plummeting. Furthermore, the thing about subsidies such as those that Iran doles out is that they are self-propagating. Note that in 2005, Iran exported $44 billion in oil, but spent $25 billion in subsidies, meaning that if oil fell to $30/barrel, Iran's export revenue would effectively become zero if the same level of subsidies are maintained. 34 cent/gallon gasoline leads to more car purchases and hence more demand for gasoline, increasing the cost of maintaining the subsidies, and hence the oil price floor at which Iran's export revenues would shrink to zero. At $120/barrel, the subsidy obligation will be so burdensome that even a drop back down to $70/barrel would lead to a revenue falling behind expenses. At the same time, China will have no choice but to aid in the hastening of these technological advances, as they will have to shift their priorities from locking up oil contracts to reducing the crushing cost of oil imports at $120/barrel.

On the other hand, if oil stays at or below $70/barrel for the long term, Petrotyrants will survive to continue their nefarious activities for at least another 20 years to come. China, too, will continue their current stance of propping up Petrotyrants.

Thus, I say bring $120 on. We outspent the Soviet Union on defense, and we can outspend the Petrotyrants while setting them up for an inevitable cornering and collapse. Give me $120/barrel oil by 2010, and I will give you the demise of Petrotyranny in Russia, Iran, and Venezuela by 2015. Count on it.

Update (10/19/07) : We're up to $90/barrel already! While there will be ups and downs in the traded daily price, and the gloomy media coverage might appear frightening, be patient and disciplined. The short-term pain will lead to permanent long-term gain.

Update (5/22/08) : Oil has crossed $120/barrel, and is currently as high as $133. Such a rapid rise usually is followed by a precipitous drop, and we need the price to stay above $120 for an extended period to realize the benefits described in the article. I might do a v 2.0 in 2008 itself if the price stays high.

When Google conducted an IPO in August of 2004, it was the first multibillion-dollar offering for a Silicon Valley company after the deep recession of 2001-03. Google achieved a market capitalization of over $20 billion on the first day, and several hundred employees became millionaires. The infusion of new money into Silicon Valley was a major factor in shaking off the final stages of the preceding bust. Today, Google's market cap stands at over $160 billion.

Now, almost exactly 3 years later, another company called VMWare (VMW) has had an IPO, achieving a market capitalization of $23 billion, bringing overnight riches to many employees. Amazingly, VMWare was acquired by EMC for just $635 Million in December of 2003. That means the valuation of the company has risen about about 36X in just over 3.5 years, in a sector of technology that very few people are familiar with.

VMWare's business is entirely different from Google's, but its effect on Silicon Valley will be similar. An infusion of billions of dollars of cash into the ecosystem causes tremors in the tectonic plates of the Valley. The event refills venture capitalist coffers which, in turn, fertilizes the Valley to grow thick with another wave of startups. The cycle thus begins anew.

Without fail, major liquidity events like this have occurred after intervals no longer than 4 years, even if there is a steep downturn in between (as in 2001-03). There have been other, smaller IPOs in recent months, such as Cavium Networks (CAVM), Aruba Networks (ARUN), and Infinera (INFN), each weighing in at between $1.1 and $1.5 Billion. The next cycle has begun in earnest. Let's see where it takes us.

If we were to make a list of subjects ranked by the gap between the civilizational importance of the topic and the lack of serious literature devoted to it, historical acceleration of economic growth would be very near the top of the list. I wrote an article on the subject way back on January 29, 2006 (version 1.0), but now it is time for a much more substantial treatise.

In the modern age, we take for granted that the US will grow at 3.5% a year, and that the world economy grows at 4% to 4.5% a year. However, these are numbers that were unheard of in the 19th century, during which World GDP grew under 2% a year. Prior to the 19th century, annual World GDP growth was so little that changes from one generation to the next were virtually zero. Brad Delong has some data on World GDP from prehistoric times until 2000 AD.

If I put historical per-capita GDP through 2000 in a logarithmic timescale, we see the following :

The theme of acceleration readily presents itself here, and even disruptive events like the Greagt Depression still do not cause more than a temporary deviation from the long-term trendline. A different representation of the data would be to notice the shrinking intervals that it takes for per-capita World GDP to double.

10000 BC to 1500 : 11500 years without doubling

1500 to 1830 : 330 years

1830 to 1880 : 50 years

1880 to 1915 : 35 years

1915 to 1951 : 36 years (Great Depression and World Wars in this period)

1951 to 1975 : 24 years (recovery to trendline)

1975 to 2003 : 28 years

2003 to 2024-2027? : 21-24 years (on current trends)

This not only further reveals acceleration, but also indicates that massively disruptive world events still result in merely temporary deviations from the long-term trendline.

Additionally, we can take the more granular IMF data of recent World GDP growth, and plot a trendline on it. Both nominal and PPP growth rates are available, and are diverging due to the increasing size and growth rates of India and China. Unfortunately, the IMF data only goes back to 1980, and 28 years are not enough to plot an ideal trendline, but nonetheless, the upward slope is distinct, and recessions (which still do not push World GDP growth into negative territory) are invariably followed by steep recoveries.

It is also important to note that the standard deviation of the IMF data for World GDP growth rates is about 1% a year, for both the nominal and PPP series (1.07% and 1.14% respectively, to be exact). The rules of standard deviations dictate that 68% of the time, a data point will be within one standard deviation of the mean, 95% will be between two standard deviations, and 99.7% will be within three.

Thus, in a simple example, if the World GDP growth trendline is currently at 4% a year, there is a 68% chance that the next year will be between 3% and 5%, and there is only a 0.3% chance that the next year will be below 1% or above 7% growth. This means that a worldwide recession with a year of negative growth is extremely improbable, just as improbable as a year with stupendous 8% growth. There is not a single year in the 1980-2007 IMF data with negative GDP growth, and virtually none under 1% growth.

Now, what happens if we project these trendlines through the 21st century? The dotted red line represents the median trend assuming that nominal and PPP growth rates converge at some intermediate level.

I can apply this trendline for World GDP growth, make assumptions of total world population to arrive at per capita World GDP growth, and add it back to the first graph. The assumed growth rates, by decade, in per capita income are :

2007-2020 : 3.5%

2020-2030 : 3.5-4.0%

2030-2040 : 4.0-5.0%

2040-2050 : 5.0-6.0%

This leads to estimates for per-capita GDP at PPP, in 2007 dollars, to be :

2007 : $10,000

2020 : $15,155

2030 : $22,400

2040 : $32,600 - $36,000

2050 : $53,200 - $64,500

Which, when plotted, provides the following :

Or, when a longer view is taken, in terms of logarithmic periods going back from the year 2050, we see :

This article is the inaugural entry into a new category here at The Futurist titled "Core Articles". These are the articles which are designed to form the cornerstone of a comprehensive understanding of the future, and are suggested reading for anyone interested in the subject. Additional articles will be upgraded to "Core" status as augmentations to them accumulate.

My thoughts on general immigration to the US are free-market oriented, and thus in opposition to isolationist conservatives as well as big union leftists. I believe that, within reason, immigration to the US should accomodate market forces.

However, the immigration situation today is nearly the opposite of this. 11 million have entered the US illegally, and are mostly at the bottom of the skill ladder, thus consuming far more taxpayer resources than they contribute. They are actually a disproportionaly high percentage of our prison population. At the same time, the pathway for highly skilled immigrants to smoothly and easily settle in the US is bureaucratic, painful, and often takes 7-12 years to complete. During this process, they are restricted from changing employers to seek better opportunities, are unable to secure permission for their spouses to work, and live with the psychological burden of being in limbo for an inhumane duration of time.

Making it easy for people at the bottom of the skill ladder to come here through violation of our laws, while making it extremely tortuous for people at the top of the skill ladder to come here legally, has got to be just about the biggest failure in US governmental policy today.

I am under no illusions that the mediocre intellects in the US government will be able to execute such a simple yet beneficial overhaul of our immigration paradigm, but I will propose a solution anyway.

_____________________________________________________

The US should allow free, easy, unlimited immigration of any individuals who have completed a Bachelor's degree in any field, from any country, from a demonstrably legitimate institution. The US decides which institutions meet the criteria of accreditation/legitimacy, and maintains the list, by country, on an easily accessible website. I would not even restrict it to people with only engineering degrees, or people who have only been educated in English. I believe that just about anyone with this level of education can quickly get a decent job in America, particularly since only those who are confident in their abilities will make the move to begin with.

Currently, about 30% of US adults above the age of 25 possess a Bachelor's degree, and it makes sense to bring in people who increase this percentage, rather than decrease it (as current unskilled illegals do). The unemployment rate for people with a Bachelor's degree is just 1.2%. Even a policy this open will not result in more than 750,000 people immigrating to the US per year. At an average of $60,000 a year, this adds an incremental $45 Billion to US GDP every year, which is a 0.3% increment to GDP growth every year.

At the same time, immigration of people with less education should be restricted to minimal quantities. There is no reason to dilute the educational attainment of US society, and thus dilute per-capita GDP. The bogus claim that "they do critical jobs that Americans will not do" is easily disproven by the fact that in the 1980s and 1990s, states like Ohio, Pennsylvania, New Hampshire, North Carolina, etc. were fully functioning societies without the need for a vast underclass of unskilled illegals. US-born citizens did minimum wage jobs in those societies.

In short, we should bring in more above-average people and fewer below-average people. The simple policy outlined above will have vast and dramatic benefits to the US economy and American society. Economic growth and tax receipts will surge. Real estate prices will rise and construction will boom. MNC's will re-center more of their operations in the US. College-educated immigrants are the cause of almost no violent crime. Political and economic ties with India and China will strengthen, as most of the new immigrants will be from these two nations. There is virtually no downside amongst these multiple upsides, and I challenge anyone to come up with one (the notion of wage despression through such immigration is already debunked).

Yes another benefit is the destruction of 'political correctness' that accompanies the present debate. An education-weighted immigration policy will favor Indian, Chinese, South Korean, and Russian immigration, while locking out many Mexican and Central American immigrants. Different cultures attach differing importance to education, and while this is readily visible in the free market that is the US workforce, multiculturism has erected barriers to obstruct these market forces. It is time that the US became more pragmatic in this regard.

“The IRS estimates they (small business owners) have to spend over 80 hours slaving at their computers to do their taxes, enough to rob them of the equivalent of a two-week paid vacation.”

I don't need to remind any US residents on how time-consuming and/or costly their own tax preparation has been, but suffice it to say that if fees, time, processing resources at the IRS, and postal services are added up, the total burden adds up to $400 to $600 billion a year in transactional wastage for the US economy. This is as large as the total economy of a country like Switzerland or Belgium.

Just about the best thing that Washington could do to further stimulate the already robust US economy is simplify the process through which taxes are collected. Again, this is not a tax cut, but merely a reduction in the transaction costs of extracting the same amount of revenue from taxpayers. Yet, the resultant productivity gain would increase GDP by 2-3% almost immediately.

I am baffled why not just the Federal Government, but even many State Governments are unwilling to collect the same revenue through a simpler process. I hear rationalizations about how "tax accountants don't want to go out of business", but that excuse makes about as much sense as tearing up roads and relaying them repeatedly in order to employ workers. And since when has there been a 'tax accountants lobby' powerful enough to obstruct the wishes of just about every other taxpaying citizen and business in America?

The even bigger irony is that simple tax codes have been adopted in former communist regimes like Russia and Ukraine. Tax evasion has predictably plummeted, even as revenues have surged. Why is America unable to enact a capitalist principle that former Soviet states have implemented?

On the political side, while neither party has indicated any intention of simplifying the tax code, Michael Mandel at BusinessWeek has created some revealing charts on tax rates by income bracket, both before and after various tax cuts. Between 1981 and 2004, the lower the income quintile, the greater the magnitude of tax rate reduction has been due to tax cuts by Presidents Ronald Reagan and George W. Bush. If anything, the highest quintile is the only tier that has seen virtually no tax rate relief.

Also note the line chart showing the tax rate drop for the middle quintile after 2001. This utterly destroys the fashionable socialist statement that Bush's tax cuts were "for the rich" - a line often spewed by someone who is incapable of detailing precisely which tax bracket was lowered by how much. Of course, you may not have this chart handy the next time you encounter someone who opposes tax cuts for reasons they can scarcely explain. Thus, as usual, such a debate is won by forcing them to demonstrate knowledge of the subject behind their own question, through a question of your own.

If they say :

"....tax cut for the rich"

you can reply with :

"Please explain which tax bracket dropped by how much through Bush's tax cut. I need to see that you know how much the lower brackets dropped by."

or

"Why do you oppose Bush's tax cuts, but not Clinton's 1997 tax cuts? Clinton cut taxes on capital gains, which certainly is good for the economy, but is far more skewed towards the rich than income is. Why don't you describe Clinton's tax cuts in more detail for me?"

At any rate, these debates are easy to win. But I will not excuse President Bush or Congress from refusing to address tax simplification, and letting the horrendous statistic of 19 to 23 cents being wasted in the process of collecting each revenue dollar continue.

Hope is on the horizon, however. Globalization is introducing market forces that are putting downward pressure on tax rates and tax complexity worldwide. Ireland has outperformed the rest of Western Europe by a wide margin in the last 12 years due to vastly lower taxes, which in turn attracts workers and businesses away from higher-tax welfare states. If the US sees an exodus of business incorporations that are instead flocking to Ireland or Bermuda, perhaps Washington will finally act.

I have come across a modest yet revolutionary concept from an Indian startup by the name of Tutorvista. The concept is not a complex one, but if this company or others like it are even moderately successful with this business model, we stand to chip away at one of society's most stubborn obstacles to economic upliftment.

Tutorvista offers unlimited online tutoring in English and Mathematics for just $100 a month, as well as preparatory coaching for standardized tests at fees under a tenth of those charged by traditional brand-name classes. All 500+ tutors are in India, have degrees in education and the subject taught, and work from home. I believe there are about 2500 students subscribing to the service to date. Tutorvista does, however, need to make substantial improvements to their website if they hope to acquire hundreds of thousands of new customers.

The tutoring sessions are interactive through the use of technologies that were not even available to consumers just 7 years ago. Real-time verbal dialogue is conducted via VoIP, while an onscreen electronic whiteboard enables written exchanges. Soon, low-cost videoconferencing technologies will combine with high-bandwidth Internet connections to expand interactivity into not just face-to-face lessons, but even multi-party discussions with each participant's face in one division of the screen.

Normally, such tutoring would cost $30 to $50 an hour or more. Yes, pessimists, racists, and socialists (sometimes the same people) will whine about private tutors losing their wages to 'outsourcing'. But this loss is dwarfed by gains derived from having access to competent individual tutoring now available to underprivileged or simply ambitious students in America. Is a 5th grader so keen on algebra that he wants to soak up 8th grade material? The risk to parents is just $100 (and even that fee can probably be transferred to a lower grade if the material turns out to be too advanced). Does a student feel embarassed about persistent difficulties with a particular subject? This model offers privacy that did not exist before.

Of course, to benefit from Tutorvista, an American student needs both a broadband connection and the self-discipline to study hard. It is arguable that students for which these two conditions are true do not corelate very closely with those who need the most help. Yet, I could predict the formation of innovative scholarships devised to grant high-school students some form of 'unlimited Tutorvista access until high-school graduation'. It may even become a popular perk offered by the parent's employer.

I stumbled upon something while reading the Asian Development Bank's report on the world economy. No big surprises here, but one tiny chart stood out. The column chart of WW and Asian semiconductor sales from 2001 to 2006 indicates that while Asia accounted for just one third of semiconductor sales in 2001, they comprise half of it today.

Do you feel that America is having a bad time? That economically, politically, and culturally, we are in a rut? Do you even wish that America had something that some other nation or region currently has?

But China has a rapid economic growth rate, that enables it to catch up with the US, does it not? With China's huge population, it needs to merely achieve a per-capita GDP that is one fourth that of the US in order to surpass the total size of the US economy. That should be relatively easy, no?

How about India, then? India will never restrict Internet access for the public, and has a young, growing population that Europe lacks. GDP growth topping 8% certainly qualifies as enviable. Surely, India has potential.

So there we have the state of three other regions that America is often compared to. I will also throw in this chart of per capita GDP on a PPP basis, over the last 60 years. The biggest takeaway from here is that basic growth appears easy, as a developing nation merely has to copy what was done by advanced nations before, but once a certain ceiling is reached, incremental growth becomes harder. No large country of over 50 Million people and a per capita GDP greater than $20,000 a year has managed to sustain a growth rate higher than the world average (currently 4.5%) for an extended period. Thus, China's rapid growth will moderate long before high per-capita GDP is reached, just as Japan's and South Korea's has. Also note that India was richer than China all the way until 1991, and was probably at parity with South Korea and even near Japan in 1950, until India foolishly allowed itself to fall behind.

Remember, the true measure of a country is the net of how many people want to get in, and how many want to get out. This metric appears to rank America right on top.